For the first time in a decade, EU central banks, thanks to the record prices achieved by the yellow metal, are once again net sellers of gold. A phenomenon that has not been seen since 2010 and which is the result of a hunger for liquidity, triggered by the coronavirus emergency.
According to a World Gold Council report, in the third quarter net gold sales were 12.1 tonnes, compared to 141.9 tonnes in the same period of the previous year.
Sales were driven by the central banks of Turkey and Uzbekistan (which sold 22.3 and 34.9 tonnes of gold respectively) while the Russian central bank recorded its first quarterly sale in 13 years.
Over the same period, overall demand for bars fell 19% year-on-year to its lowest level since 2009, largely due to continued weakness in jewellery purchases.
The decline in jewellery was partially offset by a 21% increase in demand from investors, according to the WGC.
Gold, after the records of August, began to decline
After the records reached in August, when prices had reached a record $2,075 an ounce, prices have taken the downward path, falling under the $1,900 ceiling in recent weeks.
“Not surprisingly, under the circumstances, banks can look at their gold reserves,” she explained to Bloomberg Louise Street, WGC’s chief analyst. “Virtually all sales come from banks that take advantage of the high price of gold at a time when their accounts are under pressure.
The weakness of gold has also triggered volatility on other commodities. In recent sessions, sales on international markets have also affected other precious metals such as silver and palladium. At the same time, the dollar and safe-haven currencies such as the Swiss franc and the yen have once again appreciated.