For the first time since 2010, Central banks became gold sellers as some producing nations exploited near-record prices to soften the blow from the Covid-19 pandemic. Net sales totalled 12.1 tons of bullion in the third quarter, Vs with purchases of 141.9 tons a year earlier, as per the report of the World Gold Council.
Selling was driven by Uzbekistan and Turkey, while Russia’s central bank posted its first quarterly sale in thirteen years, the World Gold Council said. While inflows into exchange-traded funds have driven gold’s advance in 2020, buying by central banks has helped strengthen bullion in recent years. Citigroup Inc. last month forecast that central bank demand would rebound in 2021, after slowing this year from near-record purchases in both 2018 and 2019.
Gold rallied to a record above USD2,075 an ounce in August, before falling to trade around USD1,900 in recent weeks. Overall bullion demand declined 19 PERCENT year-on-year to the lowest since 2009 in the latest quarter, the World Gold Council said, largely thanks to continued weakness in jewellery buying. Indian jewellery demand fell by half, while Chinese jewellery consumption was also down.