Are Central Banks ofloading their gold stocks?

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(Kitco News) –
After a move to a new record high in gold in 2020, it seems that some central banks may be cashing in and trying to offload some stock at elevated levels. Purchases dropped 39% to 233 tons in the first half from the same period a year ago, according to the World Gold Council (WGC).

Central banks around the world are struggling for liquidity while some of the larger ones are still printing money in the form of QE. According to government statistics, Uzbekistan sold around $5.8bn worth of the yellow metal. According to the Financial Times, central banks became net sellers of gold in August for the first time in around 18 months. 

The World Gold Council (WGC) confirmed a net 12.3 tonnes of gold were sold over the month, according to estimates. The WGC said that central banks, which collectively hold 35,000 tons of gold worth about $2 trillion, sold 12.3 tons more than they bought in August. Central banks bought 656 tons of gold in 2018, the highest number in half a century. To put this into perspective last year (2019), purchases amounted to 650 tons.

Its not all doom and gloom as the rally has still been sustained by retail investors with exchange-traded funds (ETF) purchases. Investors have invested around $60 billion into such ETFs 2020 and the year is not over yet. Other central banks have also still bought 200 and 300 tonnes according to the WGC. The Turkish central bank has remained bullish becoming the worlds largest buyer this year with 194 tonnes being purchased.

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