More central banks are again buying gold, boosting the global reserves by 8.8 tonnes in February, according to the World Gold Council.
Among the biggest buyers were India and Uzbekistan, which acquired 11.2 tonnes and 7.2 tonnes, respectively. Kazakhstan added 1.6 tonnes, while Colombia purchased 0.5 tonnes.
Central banks buy gold to diversify their reserves and hedge against inflation. During the second half of 2020, buying activity slowed down, as some central banks opted to sell part of their reserves.
In February, the only notable sale of gold was done by Turkey, which divested a total of 11.7 tonnes, putting the year-to-date global net sales at 16.7 tonnes, the weakest in over ten years. In January central banks sold a net 25.5 tonnes of gold.
“Central banks tipped back into net purchases… [But] the picture for central bank demand remains somewhat uncertain, with the sector bobbing between net sales and net purchases in recent months,” said Krishan Gopaul, World Gold Council senior analyst for Europe, Middle East and Africa.
“Our expectation remains that central banks will be net purchasers in 2021, but the immediate outlook for central bank demand remains finely balanced.”
As of April 2021, told gold holdings held by central banks stood at more than 35,218 tonnes.
Within the Gulf Cooperation Council region, Saudi Arabia has the biggest reserves at 323.1 tonnes, followed by Kuwait with 79 tonnes, Qatar (56.7 tonnes) and UAE (50.7 tonnes).
(Writing by Cleofe Maceda; editing by Seban Scaria)
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