Central banks maintain interest in gold in July

Today we’ve published our latest central bank statistics which now includes data for July.¹ Central banks added a net 30.1 tonnes (t) to global official gold reserves during the month, virtually in line (+0.3%) with net purchases in June. This continues the healthy level of interest in gold we have seen from central banks so far this year.

Overall central bank net purchases remained healthy in July

Central bank net purchases in tonnes* 

Gross purchases totalled 34.3t for the month, down significantly from 63.1t in June, which was boosted by Brazil’s 41.8t purchase. The large, strategic purchases we have seen from Hungary, Thailand, and Brazil in recent months are unlikely to be repeated frequently. Activity in July therefore represents a return to the trend of more modest buying by a range of emerging market central banks. Brazil (8.5t) was the largest purchaser, followed by Uzbekistan (8.4t) and India (7.5t) in adding significantly to their gold reserves. Turkey, Russia, Kazakhstan, and Mongolia bought a combined 9.8t over the month. We believe that Russia’s addition was a one-off purchase likely as a rebalance following a few months of coinage-related sales.

Individual purchases and sales were more modest than in recent months

Central bank net purchases by country in tonnes*

Total gross sales were also significantly lower compared to June. In July, they totalled a meagre 4.2t, down 28.9t m-o-m. Qatar (2.2t) and Poland (1.9t) were the only two central banks to register meaningful declines in their gold reserves.

The latest data, coupled with the findings from our recent Central Bank Survey, reinforces the view that central banks remain positive on gold. We maintain our expectation that central bank net buying will be positive for the year, and it’s looking more and more likely that it will be at a significantly higher level than 2020.