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Central bank gold demand remains healthy according to the WGC

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(Kitco News) - The World Gold Council has released their latest central bank statistics which now includes data for 1st July. Central banks added a net 30.1 tonnes (t) to global official gold reserves during the month, virtually in line (+0.3%) with net purchases in June. The report noted that gross purchases totalled 34.3t for the month. This is down from 63.1 tonnes in June.

Brazil made a hefty 41.8t purchase, and the large strategic purchases we have seen from Hungary, Thailand, and Brazil in recent months are unlikely to be repeated frequently. Activity in July, therefore, represents a return to the trend of more modest buying by a range of emerging market central banks.

In terms of a country by country breakdown, Brazil (8.5t) was the largest purchaser, followed by Uzbekistan (8.4t) and India (7.5t) in adding significantly to their gold reserves. Turkey, Russia, Kazakhstan, and Mongolia bought a combined 9.8t over the month. It is believed that Russia’s addition was a one-off purchase likely as a rebalance following a few months of coinage-related sales.

On the selling side, total gross sales were also significantly lower compared to June. In July, they totalled a small 4.2t, down 28.9t M/M. Qatar (2.2t) and Poland (1.9t) were the only two central banks to register meaningful declines in their gold reserves. The latest data reinforces the view that central banks remain positive on gold.

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