Central Banks On A Prowl For Gold: Demand Up 73% Compared To 2018 — WGC
(Kitco News) - Central banks’ appetite for gold has yet to be sated and continues to provide a strong pillar of support for the market as prices hold around $1,400 an ounce.
Official central bank reserve data is starting to filter through financial markets, showing that June was a busy month for gold purchases, and comes after a relatively quiet May, according to the World Gold Council.
Monday, the WGC updated central bank gold demand for May; in a statement Krishan Gopaul, analyst with the market intelligence group at the WGC said that reported net gold purchases in May totaled 35.8 tonnes, a drop of 27% from April. However, year-to-date purchase are up 73% compared to 2018.
“Several emerging market central banks – including Russia, China, Turkey and Kazakhstan – have dominated buying for a few years now, and this is still the case in 2019 with those banks [being] the four biggest buyers so far.”
The comments from the WGC come after data from the Chinese central bank showed that its official gold reserves increased by 10.3 tonnes last month. The latest report follows on the heels of the Polish central bank announcing last week that it bought 95 tonnes of gold in June.
The increase in official gold reserves in the first half of this year comes after 2018 saw record demand from central banks.
In a recent interview with Kitco News, Juan Carlos Artigas, director of investment research at the WGC, said that they don’t expect the current trend to end anytime soon.
Artigas noted that central banks have been net-gold buyers for nine consecutive years.
“The rationale central banks are using to explain their gold purchases is for safety and diversification and I don’t think that will be going away,” he said.