① According to a report released by the World Gold Council, Uzbekistan continued the sell-off pace at the end of last year, and the country's central bank saw a sharp increase in gold sales in the first quarter; ② Selling gold was necessary for Uzbekistan. Last year, the country's trade deficit reached a record 13.7 billion US dollars.
Finance Association, May 21 (Editor Zhao Hao) On Monday (May 20), the price of spot gold once rose to a record high of 2,450 US dollars per ounce, rising more than 17% year to date.
In the face of macroeconomic and geopolitical uncertainty, consumers and retail investors have been buying gold as a means of preserving value. On the other hand, a large part of the reason for the bullish price of gold is that central banks around the world have been snapping up this precious metal.
Although the trend of many central banks hoarding gold continues, a small portion of it has turned to sell-off in the past few months to lock in the benefits of sky-high gold prices.
According to a report released by the World Gold Council (WGC), Uzbekistan continued the sell-off pace at the end of last year. The country's central bank saw a sharp increase in gold sales in the first quarter, selling 10.9 tons in March and 11.8 tons in February. The report also shows that Thailand, which has been increasing its gold holdings for a long time, also sold 9.6 tons in March.
In 2022, Uzbekistan bought a large amount of gold, and the country said last year that it was rebalancing its reserves by reducing its share of gold holdings. Data as of March of this year show that, even after multiple rounds of sell-offs, Uzbekistan's gold reserves still account for nearly three-quarters of its reserves.
The analysis points out that Uzbekistan has a natural advantage as a seller because the country itself is a large producer of gold. WGC once commented in the report, “It's not that surprising when we see fluctuations between buying and selling in Uzbekistan and Kazakhstan in recent years.”
According to WGC, in 2022, Uzbekistan produced 110.8 tons of gold, making it the tenth largest gold producer in the world that year. Local media reported that the Central Asian country exported $8.2 billion worth of gold last year.
It should be pointed out that selling gold is necessary for Uzbekistan. The country's trade deficit reached a record 13.7 billion US dollars last year. Furthermore, its native currency, the Uzbek som, has also faced tremendous pressure for many years. In the past year alone, the som depreciated 10% against the US dollar.
Previously, the Uzbek government ordered a 50% increase in gold production by 2030. However, this increase may not be sufficient to meet rising global demand. According to data from the World Gold Council, global demand for gold in 2022 was close to 4,700 tons, far exceeding the production of 3,628 tons in that year.