Many metals traders may have been thinking in the past two months whether they should buy gold when the price is already so high. However, from the latest disclosed information, at least global central banks were not scared off by the high price during the hot trend of gold price in April...
In the past two months, many precious metal traders may have been considering one question: Should they buy gold even though the price is so high?
However, according to the latest disclosed information, at least global central banks were not scared away by the high price during the red-hot bull run of gold prices in April...
The latest report released on Tuesday by the World Gold Council (WGC) showed that the global central banks' net purchases of gold rose to 33 tons in April, a significant increase from the revised data of 3 tons in March, indicating that the central banks' demand for gold in the gold sector is still strong despite its high price.
The safe-haven demand brought about by global geopolitical and economic uncertainty has pushed up gold prices significantly from March to May this year. April was an extremely important month behind the climb to the annual high for gold prices, with the spot gold price reaching as high as $2,431, not far from the historical high of $2,449.89 per ounce touched in May.
In a research report on Tuesday, the World Gold Council said that the rapid rise in gold prices in March raised several questions. One of the issues is whether central banks - whose demand is considered a key reason for the recent rise in gold prices - will change their gold buying behavior.
The World Gold Council added that preliminary data for April showed a rebound in net gold purchases, which may indicate that central banks around the world have so far shrugged off the adverse impact of soaring gold prices and continued to execute their strategic buying plans.
In the past two years, with central banks around the world diversifying their foreign reserve holdings, the global central bank demand for gold has been on the rise.
According to preliminary statistics from the World Gold Council, the total gold purchases by central banks around the world slipped slightly from 39 tons in March to 36 tons in April, while the total gold sales by them dropped sharply from 36 tons in March to 3 tons in April.
At least eight central banks increased their gold reserves by one ton or more in April. The Central Bank of Turkey was the largest gold buyer that month, with its official holdings increasing by 8 tons. So far, the Turkish central bank has bought gold for 11 consecutive months, bringing its official gold holdings to 578 tons.
The central banks of Kazakhstan (6 tons), India (6 tons), Poland (5 tons), the Monetary Authority of Singapore (4 tons), the Central Bank of Russia (3 tons) and the National Bank of the Czech Republic (2 tons) were the other major gold buyers in April.
It is worth mentioning that the pace of China's central bank's gold purchases slowed down in April. Data released by the People's Bank of China last month showed that as of the end of April 2024, China's central bank gold reserves reported 72.8 million ounces, an increase of 60,000 ounces (1.7 tons) month-on-month, which is the lowest increase since November 2022. China's central bank began this round of gold reserve accumulation in November 2022, and has seen continuous growth for 18 months until April 2024.
So far this year, the World Gold Council says that the central banks of Turkey, China, India and Kazakhstan have been the largest net buyers of gold in the central bank sector.
Editor/ruby