Central banks reduced investment in gold in August for the first time in a year and a half

Central banks reduced investment in gold in August for the first time in a year and a half

Central banks reduced investment in gold in August for the first time in a year and a half

LONDON (Reuters) – The world's central banks sold more gold in August than they bought, interrupting the precious metal's year-and-a-half accumulation, the World Gold Council (WGC) said Wednesday.

Spot gold prices jumped from just above $ 1,500 per troy ounce in early 2019 to a record $ 2,072.50 per ounce in early August this year, then declined to around $ 1,900.

European and North American investors hoarded gold in hopes of preserving their investments during the pandemic, and this was the main reason for the rise in prices. In the meantime, demand from other large consumers, including jewelers and central banks, has been weak, raising questions about the sustainability of the rally.

The excess of gold sales by world central banks over purchases in August was 12.3 tons, according to the WGC. In particular, the Central Bank of Uzbekistan sold 31.7 tons of precious metal, leveling the purchases of the central banks of India, Kyrgyzstan and Turkey.

Collectively, central banks own about 35,000 tons of gold worth $ 2 trillion. In 2018, the world central banks acquired 656 tons of gold, a record for half a century, and 650 tons in 2019.

(Peter Hobson. Translated by Vladimir Sadykov. Editor Anna Kozlova)

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