The pace of gold purchases by central banks worldwide in the third quarter of this year was the fastest since late 2024.
According to a report by the World Gold Council (WGC) on November 3, central banks bought a net total of 321 tons of gold from July to September. This marks the highest buying rate since the end of 2024.
After a sluggish start to the year, the buying momentum picked up in the third quarter, bringing the cumulative net gold purchases by central banks to 675 tons as of September, slightly higher than the same period last year.
About two-thirds of the gold purchased in the third quarter was not disclosed by the central banks themselves. The WGC estimated this figure based on public data, trade statistics, and local surveys.
Among the central banks that disclosed their purchases, China and Poland were the most active buyers, adding 63 tons and 41 tons, respectively, in the third quarter. In contrast, Russia was the only major country to sell gold, offloading 19 tons.
This trend highlights that central banks remain a key source of demand supporting gold prices amid a generally weak gold market this year.
Central banks have been a major driving force behind the rise in gold prices over the past several years. However, since the outbreak of the war in Iran at the end of February, gold prices have fallen by about 25% from their peak earlier in the year. The rise in energy prices has increased expectations for tightening monetary policies across various countries. When interest rate hike prospects strengthen, the appeal of gold, which does not pay interest, tends to diminish.
John Reid, WGC's chief market strategist, noted that the decline in gold prices may have actually prompted some central banks to increase their gold purchases. He explained that central banks anticipating a long-term weakening of the U.S. dollar may have been incentivized to convert some of their foreign reserves into gold, taking advantage of the recent strength of the dollar.
Despite the recent decline in gold prices, there has been a significant influx of funds into exchange-traded funds (ETFs) backed by gold. According to the WGC, gold ETF holdings increased by 211 tons in the third quarter, reaching an all-time high.
* This article has been translated by AI.
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