Central banks bought gold again in April

Central banks again added a lot of gold to their reserves in April, according to the World Gold Council in a new update. In total, they bought 74.1 tonnes of gold in April, which is almost entirely accounted for by five central banks. Thailand added a whopping 43.5 tonnes to its reserves, while Turkey increased its gold reserves by 13.4 tonnes. Furthermore, it was mainly Central Asian countries that bought precious metals, namely Uzbekistan (8.4 tonnes), Kazakhstan (4.6 tonnes) and Kyrgyzstan (3.8 tonnes).

The sale of gold by central banks was limited to Russia (-3.1 tonnes) and Germany (-1.3 tonnes) in April. These countries used part of their stock to mint collectible coins. For example, the Russian central bank recently announced new gold and silver Collectible Coins on the occasion of the European Football Championship. This brings net purchases by central banks to 69.4 tonnes in April. Although this is less than in the previous month, it is more than in the second half of last year. At that time, many central banks stopped Buy gold, possibly due to the high level of Gold price. Below you can see the purchases and sales of gold by central banks over the past few months.

Central banks restart gold purchases (Source: World Gold Council)

Central banks are buying gold again

Since the 2008 financial crisis, central banks have been net buyers of gold. A large number of countries, mainly emerging economies, have since replenished their stocks. In the second half of last year, this trend seemed to stagnate for a while. Due to the corona crisis, some countries had to draw on their reserves, including their gold reserves. The high gold price and tightness in the physical gold market also prevented central banks from buying more. In March, for example, the Russian central bank decided to suspend its asset purchase programme indefinitely. pause.

Nevertheless, the trend continues, as central banks are now adding precious metal to their inventories again. In the first four months of this year, they bought an estimated 150 to 200 tons of gold. This figure is largely coloured by Hungary and Thailand with purchases of 63 and 43.5 tonnes respectively, but other countries are also interested in buying more. According to analyst Krishan Gopaul of the World Gold Council, there is still more interest in buying than selling. This is due to geopolitical risks, de-dollarization and negative interest rates.

This contribution was made from Geotrendlines