Gold purchases by central banks were strong in April despite high prices, WGC says

Bank of England gold vault. (Image from archives)

Net purchases of gold by global central banks rose to 33 metric tons in April from a revised net buying of 3 tons in March, the World Gold Council (WGC) said, signalling continuing strong appetite from the sector despite high prices for the metal.

Safe-haven demand, driven by geopolitical and economic uncertainty, as well as persistent central bank buying contributed to a rally in gold in March-May. The spot price hit a record high of $2,449.89 per ounce on May 20.

“The rapid rise in the gold price during March raised several questions. One of these was whether central banks – whose demand has been posited as a key reason for the recent rally – would change their gold buying behaviour in response,” WGC said in a research note on Tuesday.

“The preliminary pick-up in net purchases in April may suggest that central banks have thus far shaken off the rally in the gold price and continue with their strategic buying plans,” it added.

Demand from global central banks for gold has been elevated for two years as they diversify their foreign currency reserves. A survey showed on Tuesday that central banks plan to continue to increase their exposure to gold.

In April, gross gold purchases by central banks dipped to 36 tons from 39 tons in March, but gross sales saw a drop to 3 tons in April from 36 tons in March, the WGC said.

It revised the March net purchases to 3 tons after the central bank of the Philippines reported a sale of 12 tons.

Central banks of Turkey, China, India and Kazakhstan are the largest net buyers of gold so far this year, according to the WGC.

(By Polina Devitt; Editing by Bill Berkrot)


Your email address will not be published. Required fields are marked *