Central Banks Gold Buying Picks Up In September To 13 TonnesBy Kitco News
Thursday November 03, 2016 14:26
(Kitco News) - Although central bank gold purchase has been uninspiring this year, one research firm remains optimistic that this segment of the market will continue to grow.
According to Capital Economics, quoting data from the World Gold Council, central banks, were net gold buyers last month, purchases totaling 13 tonnes.
Once again, a prevalent theme for the las three years, the Russian central bank was the biggest gold buyer, purchasing 16 tonnes last month. The People’s Bank of China bought almost 5 tonnes of gold last month and Kazakhstan bought slightly more than 4 tonnes. Simona Gambarini, commodities economist at the UK based firm, noted that the buying from the three central banks out weighed 13 tonnes of gold, sold by Turkey.
However, Turkey’s official gold reserves are extremely volatile as the nation also includes commercial holdings from banks in its reserves.
Gambarini noted that so far this year central banks have bought a total of 52 tonnes of gold so far this year, well be below officials purchases seen during the same time frame last year.
However, she added that she still sees an opportunity for gold to play an important role in central bank reserves.
“While there is little doubt that central banks’ demand for gold has slowed sharply this year, temporary factors, like Venezuela selling its gold to keep its economy afloat, have played a role. What’s more, with around a third of global government debt yielding negative interest rates, central banks are likely to turn to gold to optimize their reserves,” she said in her report. “We continue to expect central banks from developing economies to be the main source of demand from the official sector in the future, as they typically have much lower gold holdings as a percentage of total reserves compared to those in advanced economies.”