Central bank buying continued in May, with 10 tonnes of net buying during the month, however demand moderated during the month. May’s purchases were led by emerging market central banks with the National Bank of Poland the largest gold purchaser, followed by the Central Bank of Turkey and the Reserve Bank of India, according to data from the World Gold Council (WGC).
However, China has seen a slowdown in gold purchases over recent months. The People’s Bank of China didn’t add gold to its reserves for a second consecutive month in June. In May, China’s central bank didn’t add gold to its reserves ending an 18-month buying spree that had driven gold prices to record highs, with high gold prices likely to have deterred further purchases for now. Bullion held by the PBoC was unchanged at 72.8 million troy ounces at the end of last month.
Meanwhile, the Reserve Bank of India added more than nine tonnes in June – the most since July 2022. India’s reserves have expanded by 37 tonnes this year to 841 tonnes.
We still expect central bank demand to remain strong looking ahead amid the current economic climate and geopolitical tensions.
The recent WGC survey indicates that central bank purchasing will remain strong, with 29% of central bank respondents intending to increase their gold reserves in the next 12 months – the most since the WCG started a gold reserve survey in 2018.
In 2023, central banks added 1,037 tonnes of gold – the second-highest annual purchase in history – following a record high of 1,082 tonnes in 2022.
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