Insights

Global central banks reported net sales of 27t in May, less than half the net sales seen in April. Excluding Türkiye’s sales, the trend in central bank buying is still in place.

Central bank gold reserves declined by 71 tonnes in April, primarily due to Turkish selling. Despite this, we expect central banks to remain net buyers in 2023, supported by their overall positive sentiment towards gold reserves.

Central bank gold demand in 2023 picked up from where it left off in 2022. In January, central banks collectively added a net 31t to global gold reserves  (+16% m-o-m).

In December, central banks have reported adding a net 28t of gold to global reserves, down sharply (53%) from the previous month (60t).

The international gold price jumped by 7.4% in November to US$1,760/oz, boosted by lower yields and dollar weakness.

The domestic gold price diverged from the international gold price: the MCX Gold Spot price rose marginally by 0.2% compared to a 2% decline in the LBMA Gold Price AM in USD

Gold’s price divergence continued: the Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 1%, while the LBMA Gold Price AM in USD saw a 2% fall in October.

Gold plays an important role in the management of reserve assets, being one of the few assets that are widely approved under the investment guidelines used by the world's central banks.

Healthy retail demand in September drove the local price briefly into premium, but market dynamics generated a discount for much of the month. Indian gold ETFs witnessed a marginal net inflow of 0.4t in September as a domestic gold price correction enticed investors back into gold  
 

Central bank net purchases of gold slowed to 20t in August, halving m-o-m. This is the fifth consecutive month of net purchases from the central banking sector.

The Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 0.5% in August while the LBMA Gold Price AM in USD saw a 2.6% fall. The average Shanghai-London gold price spread climbed further in the month, driven by stronger demand  

The Shanghai Gold Price Benchmark PM (SHAUPM) in RMB and LBMA Gold Price AM in USD both trended down in June. 

Gold has fallen more than US$100/oz over the past month, with the bulk of the decline occurring over two days last week.

Retail demand remained strong y‑o‑y during the first three weeks of May due to robust Akshaya Tritiya sales, wedding demand and the lower base period of 2021. But demand softened during the last week of the month due to a higher gold price and fewer auspicious marriage dates.

Gold prices fell in May. Primarily driven by negative momentum impacts as well as lower risk and uncertainty, the SHAUPM in RMB and the LBMA Gold Price AM in USD fell by 1.8% and 3.2% respectively in the month.

So far in 2022, central banks’ monthly gold reported activity has been bobbing between net purchases and sales linked to a fairly small number of banks. As such, any significant purchase or sale from those can tip the balance in a given month.