Net purchases totalled 33t in April, rebounding from a revised net 3t in March Broad buying from several emerging market banks offset negligible sales June sees the release of findings from our Central Bank Gold Survey 2024. The rapid rise in the gold price during March raised several questions. One of these was whether central banks – whose demand has been posited as a key reason for the recent rally – would change their gold buying behaviour in response. We now have the benefit of a more complete picture for March, as well as initial data for April, to help inform our perspective. Latest figures – reported via the IMF and publicly available sources – show that global gold reserves rose by a net 33t in April, similar to levels seen in February (27t).1 Although gross purchases dipped to 36t, from 39t in March, gross sales saw a more pronounced m/m drop from 36t to just 3t in April. Central bank net buying rebounds in April Monthly central bank gross purchases and sales, tonnes* Central bank net buying rebounds in April *Data to 30 April 2024 where available. Source: IMF IFS, respective central banks, World Gold Council Eight central banks increased their gold reserves by a tonne or more in April. The Central Bank of Turkey was the largest buyer, increasing its official reserves by 8t.2 With 11 consecutive months of buying, the bank’s y-t-d net purchases now total 38t and lift its total official gold holdings to 578t. The National Bank of Kazakhstan (6t), Reserve Bank of India (6t), National Bank of Poland (5t), Monetary Authority of Singapore (4t), Central Bank of Russia (3t) and Czech National Bank (2t) were the other major buyers in the month. The Peoples Bank of China reported a significant slowdown in its gold buying. The bank reported that its gold reserves rose by just under 2t in April to 2,264t – the lowest monthly increase since it resumed reporting in November 2022 and well below the 18t monthly average prior to April. Notable gross sales were limited to the Central Banks of Uzbekistan and Jordan. Both reported a 1t decline in their gold reserves, a notable reduction in the pace of selling seen in February and March. Central bank gold demand remains healthy so far in 2024 Y-t-d net purchases/sales of a tonne or more by central bank* Central bank gold demand remains healthy so far in 2024 *Data to 30 April 2024 where available. Source: IMF IFS, respective central banks, World Gold Council Looking back at March, net purchases for the month have been revised to just 3t following the late reporting of a 12t sale by the Central Bank of the Philippines. While gross purchases during March were relatively stable in the face of the rapidly rising gold price, gross sales saw a marked pick-up thanks to heavy sales from (now) four banks . This suggests that price performance may well have had some impact on the activity of some central banks. Despite the slowdown in March, the preliminary pick-up in net purchases in April may suggest that central banks have thus far shaken off the rally in the gold price and continue with their strategic buying plans. Of course, more data for April, as it becomes available, as well as data for May, will be instructive to further assess how central banks’ approach to gold purchases will evolve. In addition, June sees the publication of findings from our Central Bank Gold Survey 2024, which will provide a rich insight into central banks’ thinking towards gold, and how this may influence gold buying going forward. Footnotes 1 Based on monthly IMF IFS data (reported with a two-month lag) and supplemented with data from respective central banks where applicable. Most institutions report on a regular basis, but some may report with a – sometimes significant – delay. Late availability of data may lead to revisions. The data reported here informs, but is distinct from, the central bank demand estimates we report in Gold Demand Trends. 2 Turkey’s official sector gold reserves are the sum of central bank-owned gold and Treasury gold holdings. This is equivalent to gross gold reserves less all gold held at the central bank in relation to commercial sector gold policies (such as the Reserve Option Mechanism (ROM), collateral, deposits and swaps). For information on this methodology, click here.

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Gold price attracts fresh buying near the $1,995 area on the first day of a new week and maintains its bid tone through the first half of the European session. The XAU/USD is currently placed around the $2,010-$2,011 region, up over 0.40% for the day, and for now, seems to have stalled Fridays retracement slide from the vicinity of over a one-year peak. Looming recession fears benefit the safe-haven Gold price Growing worries about a deeper global economic downturn turns out to be a key factor lending some support to the safe-haven Gold price amid expectations for an imminent pause in the rate-hiking cycle by the Federal Reserve (Fed). That said, impressive bank earnings seem to have eased fears about a banking crisis that unfolded in March. Adding to this, the Retail Sales report released from the United States (US) on Friday suggested that the economy is not so bad and remained supportive of a generally positive tone around the equity markets. This, along with a modest US Dollar (USD) strength, is holding back bulls traders from placing aggressive bets around the XAU/USD and capping the upside, at least for the time being. Modest US Dollar strength keeps a lid on Gold price Despite the softer US consumer inflation and the Producer Price Index released last week, Fed Governor Christopher Waller on Friday called for further rate hikes and said that the job was still not done as inflation remains far too high. The markets were quick to react and are now pricing in a greater chance of another 25 basis point (bps) lift-off at the next Federal Open Market Committee (FOMC) policy meeting in May. This remains supportive of elevated US Treasury bond yields, which, in turn, assists the USD to build on Fridays goodish rebound from a one-year low and gain follow-through traction for the second successive day. A stronger Greenback tends to undermine demand for the US Dollar-denominated Gold price. Traders now look to US macro data for short-term impetus The aforementioned mixed fundamental backdrop warrants some caution before positioning for any further appreciating move for the XAU/USD. Nevertheless, Gold price manages to hold above the $2,000 psychological mark as traders now look to the US economic docket, featuring the release of the Empire State Manufacturing Index for a fresh impetus later during the early North American session. Apart from this, the US bond yields will influence the USD price dynamics, which, along with the broader risk sentiment, should contribute to producing short-term opportunities around the XAU/USD.

From a technical perspective, the emergence of fresh buying on Monday favours bullish traders and support prospects for an extension of the recent strong upward trajectory witnessed over the past month or so. That said, sustained weakness below the $1,995-$1,990 region, will negate the positive outlook and prompt some technical selling. The Gold price might then accelerate the corrective decline towards the $1,965-$1,960 intermediate support en route to the $1,950 horizontal zone. On the flip side, bulls might now wait for some follow-through buying beyond the $2,020 area before placing fresh bets. The Gold price might then climb to the YTD peak, around the $2,047-$2,049 region touched last Thursday. The subsequent move up has the potential to lift the XAU/USD back towards retesting the all-time high, around the $2,070-$2,075 region touched in August 2020.