Central Banks Become Net Sellers Of Gold

Central banks became net sellers of gold for first time in a decade in Q3 2020 as the pandemic continues to rage, a study by the GFMD team at Refinitiv has revealed. The study also highlights that gold demand falls by 30% year-on-year and jewelry fabrication remained the worst impacted sector, dragged lower by the economic impacts of the pandemic and record gold prices.

The study says the net sales of gold by central banks was estimated at just under 13 tonnes for the third quarter. “The shift was driven by an absence of purchases from Russia and China, as well as a significant rise in gross sales as countries continued the battle against covid, which has taken a severe toll on the global economy, with perhaps some also taking advantage of the gold’s astonishing price performance in recent months,” it says.

SPECTACULAR PERFORMANCE

Refinitiv says gold recorded a spectacular performance during the third quarter, soaring to an all-time high of $2,067/ oz in early August, driven by escalating fears over the global economic downturn caused by the pandemic and massive stimulus measures introduced by central banks around the globe in an attempt to lessen the impact. The metal averaged $1,909/oz in the third quarter, up by 27% from the previous three months and 30% above the level seen over the same period of last year.