Central bank gold purchases rebounded in April following a sluggish March, with global net acquisitions reaching 33 tons, according to the latest data from the World Gold Council.
March Revisions and April Turnaround
March saw net central bank gold buying revised downward to 3 tons due to a late-reported 12-ton sale by the Philippines. Additionally, Uzbekistan, Thailand, and Jordan reported significant decreases in their gold reserves for the month. However, April saw minimal selling and substantial buying, suggesting March’s slowdown was an anomaly.
Major Purchases in April
Eight central banks added at least a ton of gold to their reserves in April. The Central Bank of Turkey was the largest buyer, adding 8 tons, continuing its 11-month buying streak following the liquidation of 160 tons in spring 2023. This brings Turkey’s total gold acquisitions to 38 tons for 2024.
India also continued its gold accumulation, adding 6 tons in April, contributing to a total increase of over 260 tons since 2017. An Indian economist cited both political and economic reasons for this, noting diminished confidence in the U.S. dollar and the benefits of diversifying reserves amid market volatility.
Kazakhstan followed suit, adding 6 tons, resuming purchases after several months of selling. Poland expanded its reserves by 5 tons in April, following a 1-ton addition in March, reflecting its ongoing strategy to increase gold holdings.
Other Notable Purchases and Trends
Other central banks also increased their gold reserves:
Singapore: 4 tons
Russia: 3 tons
Czech Republic: 2 tons
Uzbekistan and Jordan were notable sellers, each reducing their holdings by a ton. It is common for countries with domestic gold production, like Uzbekistan and Kazakhstan, to oscillate between buying and selling.
China’s Consistent Gold Accumulation
The People’s Bank of China reported a modest increase of just under 2 tons in April, marking the 18th consecutive month of expanding gold reserves. Since October 2022, China has added over 300 tons to its holdings. Despite suspicions of off-the-books accumulation, China officially holds 1,448 tons of gold as of 2019.
Outlook and Implications
The World Gold Council noted that April’s robust buying indicates March’s slowdown was temporary. Central banks continue to prioritize gold for its crisis response value, diversification benefits, and stability as a store of value. The council expects 2024 to be another strong year for central bank gold demand.
In 2023, central banks purchased a total of 1,037 tons of gold, just shy of 2022’s multi-decade record of 1,136 tons. Analysts at ANZ Bank anticipate continued robust central bank gold buying over the next six years, driven by decreased trust in U.S. fixed-income assets and the rise of non-reserve currencies.
Conclusion
Central bank gold buying remains strong despite occasional slowdowns, driven by ongoing economic uncertainties and strategic diversification efforts. The resurgence in April highlights gold’s enduring appeal as a critical asset for central banks worldwide.
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