(Kitco News) - Gold prices continue to trade in elevated territory, holding new support above $4,700 an ounce, and some analysts have noted that downside risks for the precious metal remain limited as central bank demand continues to provide solid support.
Specifically, the People’s Bank of China continues to see lower gold prices as a buying opportunity, as the central bank bought 8.1 tonnes of gold in April, following its 5-tonne purchase in March.
China has been a dominant player in the gold market in recent years, increasing its official gold reserves for the last 18 consecutive months. At the same time, the pace of purchases is at its highest level since December 2024.
Analysts have said that it is difficult to be short gold when the market continues to see consistent demand from the official sector.
“Central bank purchases have been among the key drivers of gold demand for over four years,” said Barbara Lambrecht, Commodity Analyst at Commerzbank, in a note on Friday. “Despite the significant rise in prices, purchases by central banks and other public institutions in the first quarter totaled nearly 245 tonnes, according to the WGC, which was 3% higher than the previous year and even slightly above the five-year average.”
Although China has been a key player in the gold market, it is certainly not alone.
Krishan Gopaul, Senior Analyst, EMEA at the World Gold Council (WGC), said in a social media post on Thursday that updated reserve data showed the Czech National Bank bought 2 tonnes of gold last month.
“Its YTD net purchases now total 8 tonnes, helping to lift total gold holdings to over 79 tonnes,” he said.
Gopaul also said that according to preliminary estimates, Poland’s central bank bought another 13 tonnes of gold in April; however, he added that this cannot be confirmed until official reserve numbers are updated.
