Central Bank Net Gold Purchases Report Robust Start to 2020

SEATTLE (Scrap Monster):  The latest report published by the World Gold Council (WGC) denotes that net gold purchases by central banks recorded increases in the opening two months of the current year. It must be noted that the purchases had hit five-month low in December last year.

The central banks across the world bought 28.5 tonnes of gold in January y this year. The purchases increased further by almost one-third to total 36 tonnes in February. However, the purchases during the month were down significantly by 52% from February 2019. The cumulative purchases during Jan-Feb ’20 totalled 64.5 tonnes, sharply lower when compared with purchases of 116.1 tonnes in the corresponding two-month period in 2019.

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The Turkish central bank was the top gold buyer in the first two months of 2020, adding 41 tonnes. The other prominent buyers were Russia (19 tonnes), the UAE (5.9 tonnes), Kazakhstan (2.8 tonnes) and Mongolia (1 tonne). Year-to-date, the number of central banks to increase their gold reserves by at least 1 tonne totalled 5, as compared with 8 during the prior year.

WGC noted that robust purchases in Jan-Feb ’20 suggest that gold continues to be an important component of foreign reserves. However, recent market instability and uncertainty will likely impact purchases during the rest of the year, it added.