09.08.202311:26 Forex Analysis & Reviews: Central banks continue to ramp up their gold portfolios

Following a three-month sell-off, central banks bought gold again in June, said the World Gold Council. The latest data indicated that six central banks increased their gold portfolios, while two continued to sell the metal. The report also stated that the net purchase volume rose to 55 tons, with the Central Bank of Turkey and the People's Bank of China emerging as leaders. The two purchased an amount of 21 tons.

However, although Turkey purchased 11 tons of gold in June, it still needs to add more as its gold reserves remain down by 100 tons this year. Recall that the central bank sold the metal earlier to meet domestic demand, and to keep the trade balance deficit under control, the government took steps to curb gold imports.

Poland also bought a significant amount of gold - 14 tons, followed by Uzbekistan, which bought 8 tons. The Czech Republic bought 3 tons, Qatar bought 2 tons, and India bought 1 ton.

Only Kazakhstan and Singapore sold the metal in June. Kazakhstan's official gold reserves decreased by 3 tons, while Singapore fell by 1 ton.

But despite the selling pressure in June, Singapore remains a major gold buyer, as its reserves increased by more than 71 tons this year. June purchases by the central bank also coincide with the general market trend.

According to the WGC, the demand for gold from central banks in the second quarter amounted to 102.9 tons, 39% lesser compared to the demand in the second quarter of 2022. However, due to record demand in the first quarter, central bank demand in the first half of 2023 reached a record level.

In short, although demand cooled after last year's surge, analysts believe that it will continue to provide solid support to prices until the end of the year.