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With financial pressures escalating from the Corona pandemic, major central banks turned to selling gold for the first time in about 10 years, seeking to exploit high prices to record highs, which would allow them to sell gold. to provide liquidity and mitigate the effects of the pandemic.
According to a report by the World Gold Council, excerpted from Bloomberg News, the central bank’s sales volume in the third quarter of this year was around 12.1 tonnes, compared to net purchases of around 141, 9 tonnes for the same period last year.
The central banks of the countries of Uzbekistan and Turkey led the wave of gold sales by central banks in the three months until the end of last September, while the Russian central bank recorded the first sales of the metal precious in nearly 13 years, its economy being severely affected by the pandemic and a low environment for oil prices.
For many years, central bank purchases of the yellow metal have played a major role in supporting gold prices, while ETF purchases have been the metal’s biggest supporter this year, with flows records of investors wishing to protect themselves against the consequences of the pandemic.
And last month, a research note published by “Citigroup” predicted that demand for gold from major central banks around the world would recover as it slows this year after record purchases by these banks in the past two years. , which preceded it, the banks benefiting at the time of the fall in prices and increasing their holdings of gold.
“It was not a surprise,” said Lewis Street, senior analyst at the World Gold Council, “Under these circumstances, banks may resort to selling their gold holdings… In theory, the majority of sales come from banks that depended on local markets for their purchases, so it is only natural that they sell these Banks are part of their holdings to take advantage of high prices while suffering from financial pressures. “
Turkey’s central bank sold around 22.3 tonnes of gold in the third quarter of the year, with increasing financial pressures on the economy, scarcity of dollar liquidity, the lira collapsing to historic levels against the dollar and the dwindling options available to the government to save the struggling economy, while the Central Bank of Uzbekistan sold about 34.9 tons of metal. Precious.
Gold prices hit record highs at $ 2,057 per ounce last August, before retreating to trade at $ 1,900 per ounce in recent weeks.
Overall, the demand for gold declined by around 19% in the third quarter to its lowest level since 2009, which was attributed by the World Gold Council to the decline in demand for jewelry in major markets. such as India, where demand fell by around 50%, as well as China, which experienced a sharp drop in demand. .
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