Central banks report modest demand for gold in August

• Central banks reported net purchases of 8t in August – the lowest since March¹
• The National Bank of Poland was the leading buyer in the month, followed by the Central Bank of the Republic of Turkey and the Reserve Bank of India (RBI)
• The Central Bank of Kazakhstan reduced its gold holdings by 5t in August.

Central banks have continued to accumulate gold in August with reported net purchases of 8t. While overall demand has tapered from the early 2024 highs, accumulation of gold reserves remains positive, with activity concentrated in emerging market (EM) central banks. August net purchases were the lowest since March when central banks reported a net sale of 2t; it was also well below the 12-month average of 33t.

On a y-t-d basis EM central banks account for 70% of total reported net purchases with Turkey making up 25% of overall central bank buying thus far.

Central bank demand eases in August*

*Data to 27 September 2024 where available. Chart includes only purchases/sales of 0.5t or more as reported directly by central banks or via the IMF.
Source: IMF IFS, respective central banks, World Gold Council

At a country level, just four central banks added net gold (of a tonne or more) to their reserves in August.

• The National Bank of Poland was the largest buyer, adding a net 6t and lifting its gold holdings to 398t. Poland has continued its net purchase trajectory over the past five months, adding 39t over this period
• The Central Bank of the Republic of Turkey added 3t to its gold reserves in August, its fifteenth consecutive month of net purchases. On a y-t-d basis Turkey is the largest net purchaser, adding 52t of gold or about 35% of its total reserves
• The Reserve Bank of India accumulated 3t of gold, its eighth consecutive month of net buying. This makes the RBI the second highest net purchaser of gold on a y-t-d basis, with net purchases of 45t
• The Czech National Bank (CNB) added 2t of gold in August, its eighteenth consecutive month of net buying. The CNB has accumulated 33t of gold over this period, lifting its total gold reserves to 45t
• The Central Bank of Kazakhstan reduced its gold reserves by 5t in the month. This fourth consecutive month of net sales brings its gold holdings to 290t or about 55% of total reserves. Kazakhstan is now a net seller y-t-d, with gold holdings reduced by 5t.

Y-t-d central bank net purchases and sales*

*Data to 27 September 2024 where available. Chart includes only purchases/sales of 0.5t or more as reported directly by central banks or via the IMF.
Source: IMF IFS, respective central banks, World Gold Council

Reported central bank activity in August was markedly slower. While gold’s price performance is not a top strategic driver for central banks purchase, its consistent upward trend could have influenced the deceleration. However, it is worth noting that sales have not increased which may signal a likely wait and see approach rather than a change in trend. Specially, since all other key drivers of central bank decision making, such as the need for effective diversifiers and gold’s performance in time of risk remain in place. In all, our expectation remains positive for the rest of the year but, as we previously discussed, will likely be below last year’s total.

Stay tuned for our upcoming Q3 Gold Demand Trends, scheduled at the end of October, which combines a more comprehensive set of data to estimate central bank activity.

Footnotes

¹Our monthly report is limited to direct central bank reports and data provided to the IMF.