WGC: "Central Banks Buy Gold at Fastest Pace Since 2024"

Central banks around the world bought gold at the fastest pace since 2024 in the third quarter of this year.

AP-Yonhap News

According to a report released by the World Gold Council (WGC) on Nov. 3 (local time), central banks' net gold purchases totaled 321 metric tons in the third quarter. Although gold purchases were subdued early this year, net purchases for January through September were estimated at 675 metric tons, slightly more than in the same period last year.

Central banks' gold purchases have been a key factor supporting gold prices. They were among the main drivers of the rally that continued for several years, until gold prices hit a record high in January. However, gold prices have fallen about 25% since the outbreak of the Iran war in late February. Rising energy prices have strengthened expectations of tighter monetary policy, reducing the investment appeal of gold, which generates no interest income.

John Reade, WGC's chief market strategist, said the fall in gold prices in the third quarter may have prompted some central banks to increase their gold purchases. He said that for central banks expecting the dollar to weaken over the long term, the dollar's recent strength may have increased the incentive to convert some of their foreign exchange reserves into gold.

"If you expect the dollar to weaken over the long term, you can take advantage of a strong dollar to buy gold when your short-term U.S. Treasuries mature," Reade said.

About two-thirds of estimated central bank gold purchases were not officially disclosed by the monetary authorities of the countries involved. The WGC uses estimates compiled by consulting firm Metals Focus, which draws on public information, trade statistics, field research and other sources.

Among countries that disclosed their gold purchases in the third quarter, China bought the most, at 63 metric tons, followed by Poland with 41 metric tons. Russia, meanwhile, was the only major country to be a net seller of gold, offloading 19 metric tons during the same period.

Gold prices have continued to decline in recent months as the prolonged conflict in the Middle East has reinforced expectations of higher international oil prices and interest rates. However, inflows into gold exchange-traded funds (ETFs) were notable. According to the WGC, gold holdings in gold ETFs increased by 211 metric tons in the third quarter, reaching a record high.

This content was produced with the assistance of AI translation services.