According to the latest data from the World Gold Council, due to the impact of the new crown pneumonia epidemic and other factors, central banks around the world have sold gold in a net state in November 2020. With the changes in market demand, the actions of central banks in the future will show more complex changes.
Data show that global central banks were net sellers in August and September last year. Last August marked the end of the one and a half year-long monthly gold purchase period.
Last November, the global official gold reserves fell by 6.5 tons. Paul Gao, the research manager of the World Gold Council, said: “Just like the central bank’s net sales in August and September, this is the result of several large-scale sell-offs offsetting continued modest buying.”
Data show that in November last year, global central banks purchased a total of 16 tons. The countries with the largest increase in reserves are Uzbekistan (8.4 tons), Qatar (3.1 tons), India (2.8 tons) and Kazakhstan (1.7 tons). On the other hand, global central banks sold 23.3 tons in November last year, of which Turkish gold sales were the highest.
“In Turkey, rising domestic demand led to increased transactions between domestic commercial banks and the central bank, and gold reserves fell by 20.9 tons. Mongolia is another high-profile seller, with official reserves falling by US$2.4 trillion.”
The World Gold Council’s report stated that the demand from central banks has become “more volatile” because the new crown pneumonia epidemic has increased uncertainty and fiscal pressure.
It may be too early to say whether the previous trend of continuous net buying will continue, or whether it has ended, and a new trend appears. The data for December 2020 and early 2021 will help build greater The judgment of the trend is crucial,” Gao Paulo said. In general, the World Gold Council believes that central banks have not changed their thinking about demand in their reserves.
The analysis pointed out that as a safe-haven asset, the role of gold is very important. Although some uncertainties have eased in recent months, the impact of the epidemic on the economy still poses a major risk that needs to be managed.