Central bank gold purchases doubled in July, demand will continue through 2024 – WGC’s Gopaul

In the WGC’s latest report, Gopaul noted that central banks have continued to accumulate gold in recent months.

“While the overall level of reported demand has cooled as the gold price has continued to rally to new record highs, it has nonetheless remained positive,” he said. “This commitment continued in July, as global central banks are reported – via the IMF and publicly available data – to have added a net 37t to official reserves. This represents a 206% m/m increase and the highest monthly total since January (45t)”

In terms of the national breakdown, Gopaul said that the same list of central banks drove the month’s activity. “In total, seven central banks added gold (of a tonne or more) to their reserves in July, while only one central bank reduced its gold holdings,” he wrote.

The National Bank of Poland was the largest buyer in July, adding 14 tonnes to record its largest monthly increase since November 2023. “This purchase lifted its gold holdings to 392t, or 15% of total reserves,” Gopaul said. “Poland has been on a gold buying spree since April, accumulating 33 tonnes over the last four months.”

The Central Bank of Uzbekistan was second for the month, buying 10 tonnes to bring its total gold holdings to 375 tonnes. “July’s purchase has flipped the Central Bank of Uzbekistan from a net seller to a net buyer on a y-t-d basis (+3t),” he noted.

The Reserve Bank of India increased its gold reserves by 5 tonnes in July, bringing net purchases of gold to 43 tonnes in 2024 and raising its total reserves to 846 tonnes. “[T]he RBI has now added gold every month so far this year,” Gopaul said.

The Central Bank of Jordan (CBJ) bought a net 4 tonnes in July, as did the Central Bank of Turkey, which has now marked 14 consecutive months of net buying.

The Qatar Central Bank and the Czech National Bank (CNB) each increased their gold reserves by 2 tonnes. “The CNB has now added to its gold reserves for 17 consecutive months, with net purchases totalling over 31t during this period,” he noted.

“Based on available data at the time of publication, the Central Bank of Kazakhstan was the only net seller in July,” Gopaul said. “Its gold reserves fell by 4t, reducing its gold holdings to 295t or 55% of total reserves.”

“One other noteworthy change relates to the State Oil Fund of Azerbaijan (SOFAZ) – the only sovereign wealth fund in our data set,” he added. “Second quarter results show that its gold holdings rose by 10 tonnes between April and June, representing the biggest quarterly increase in gold holdings since Q2’19 (+23.7 tonnes). Total gold holdings at the end of Q2’24 were 114.9 tonnes, 13t higher than at the end of 2023.”

Gopaul said that while the gold price rally is likely impacting central bank gold demand this year, the long-running trend of net sovereign buying remains intact.

“This reinforces the findings from our latest central bank survey, which highlights several reasons (such as gold’s role as a store of value and its performance in times of crisis) why, despite the elevated price, central banks are still keen to accumulate gold,” he concluded. “Based on these findings, we continue to be confident in our expectation that more buying is to come.”

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com