Central bank buying continued in June, with 12 tonnes of net buying reported during the month, data from the World Gold Council (WGC) showed. June’s purchases were once again led by emerging market central banks. Uzbekistan and India both added 9 tonnes to their gold reserves during the month.
However, China has seen a slowdown in gold purchases over recent months. The People’s Bank of China didn’t add gold to its reserves for a third consecutive month in July. In May, China’s central bank didn’t add gold to its reserves ending an 18-month buying spree that had driven gold prices to record highs, with high gold prices likely to have deterred further purchases for now. Bullion held by the PBoC was unchanged at 72.8 million troy ounces at the end of last month, according to official data.
Meanwhile, Singapore was the largest seller (-12 tonnes) in June – it reduced its gold reserves in June by the most since at least 2000. Buying strength continues this year, although gross purchases and sales are lower compared to the same period last year. In 2023, central banks added 1,037 tonnes of gold – the second-highest annual purchase in history – following a record high of 1,082 tonnes in 2022.
However, we still expect central bank demand to remain strong looking ahead amid the current economic climate and geopolitical tensions and as prices retreat from record highs.