Central Banks, Net Sellers of Gold in August

The world gold council revealed that the net balance of operations carried out last August is negative for the first time in more than a year and a half. In other words, there have been sales greater than purchases, which indicates that the official sector was a net seller.

The statistics on the state of central bank reserves published each month by the World Gold Council, with data from the International Monetary Fund, contain a surprise in its latest edition. For the first time in more than a year and a half, central banks have sold more gold than they have bought in a month. They have reversed the trend and made themselves net sellers.

In recent years, the balance has been largely favorable to purchases. The Central Bank of the Russian Federation, the Central Bank of Turkey, and, to a lesser extent, the People’s Bank of China far exceeded the registered sales.

Now, purchases by China and Russia have been suspended for months. Other mainstream central banks such as Turkey, Kazakhstan, or Kyrgyzstan have shown fewer purchases.

The main operation responsible for this change in trend has been the sale of 31.7 tons of gold by the Central Bank of the Republic of Uzbekistan. It leaves its total reserves at 298.9 tons, 54.3% of its strategic reserves.

The Asian country has been selling part of its gold reserves in recent months to obtain liquidity to face the economic crisis derived from Covid-19. In the list published last August (with data at the end of June), its gold reserves amounted to 342.8 tons.

In addition to this operation, two other banks have reduced their reserves in August. However, sales have been small. Russia and the Czech Republic have sold 0.1 tonnes of gold.