Central banks buying more gold

Central banks bought more gold in June than during the previous month, with emerging markets continuing to lead the activity.

Research from the World Gold Council showed gross purchases hit 31 tonnes, up from 23 tonnes in May. Net purchases in June amounted to 12 tonnes.

Activity was led by central banks in emerging markets. The Central Bank of Uzbekistan and the Reserve Bank of India (RBI) each added around nine tonnes to their reserves.

The Monetary Authority of Singapore, a developed economy, was the largest seller, with 12 tonnes. Kazakhstan sold six tonnes.

The Central Bank of the Republic of Turkey remains the largest net buyer so far this year, with purchases above 40 tonnes. India, with 37.1 tonnes, and China, with 28.9 tonnes, came in second and third place, respectively.

The central banks of the Philippines, Thailand and Uzbekistan have reported the largest net falls in gold holdings. The Bank of Thailand told Central Banking in June that its decline occurred after it revised its definition of monetary gold purity to that of “at least 995/1,000” – in line with International Monetary Fund (IMF) guidance. “The reduction was not due to any gold sale,” the central bank said.

The RBI’s 9.3 tonne purchase was significantly above its 5.6 tonne monthly average for the first half of the year. Its total purchases during this period were the highest half-yearly total since 2013, and a more-than-threefold increase on the tally for the first half of 2023.

The RBI’s gold reserves stand at 840.7 tonnes, and amount to 8.7% of the bank’s total foreign reserves. The RBI has said it is looking to diversify its foreign exchange reserves.

The council gathered data from the IMF and other public sources for its research.

A survey by the council earlier this year found that 81% of the 69 central banks questioned intended to augment their gold reserves over the following 12 months.

Forty-nine per cent of those surveyed expected a moderate fall in the proportion of dollar reserves over the coming five years.