Following a significant sell-off in March, global central banks returned to the gold market as net buyers in April. However, the current pace of purchases remains below last year's levels, and the gold price outlook continues to face pressure.
According to the latest data from the World Gold Council (WGC), global central banks made net purchases of approximately 17 tonnes of gold in April. This reversed the trend from March, which saw a net sale of nearly 30 tonnes, marking the largest single-month sell-off in recent years and was primarily led by Turkey.
In April, the Polish central bank was the top monthly buyer, adding 14 tonnes. The Chinese central bank accelerated its purchases, adding 8 tonnes, which was its highest monthly purchase volume since December 2024.
Goldman Sachs has noted that despite this renewed central bank buying, the current level of purchases is still lower than in the previous year. Concurrently, ETF flows, which previously helped drive gold prices above $5,000, have continued to see outflows. Momentum-driven capital has shifted towards sectors like semiconductor and memory stocks.
Furthermore, rising U.S. Treasury yields and a stronger U.S. dollar, coupled with unexpectedly resilient U.S. economic performance, are creating multiple headwinds for gold in the near term.
Central Bank Purchases Rebound, Led by Poland and China
WGC data shows that the Polish central bank purchased 14 tonnes of gold in April. Year-to-date, its cumulative purchases have reached 45 tonnes, bringing its total gold reserves to 595 tonnes, which accounts for approximately 30% of its total reserves.
The Chinese central bank made a net purchase of 8 tonnes in April, increasing its official gold reserves to around 2,322 tonnes. This represents about 9% of its total reserves. This marks the 18th consecutive month of gold accumulation by China, continuing its consistent pattern of purchases.
The Czech central bank also maintained a steady pace, adding approximately 2 tonnes in April. This was the 38th consecutive month of increases, bringing its gold reserves to 79 tonnes, or 6% of its total reserves.
Central banks in Eastern Europe and Asia continue to dominate the global gold buying landscape. WGC data indicates that over the past 36 months, these two regions have averaged monthly purchases of 12 tonnes and 11 tonnes, respectively. Global central banks averaged net monthly purchases of 29 tonnes over the same period.
Turkey Stabilizes, Russia Continues to Reduce Holdings
Turkey, which was the largest seller in March, saw its gold reserves remain almost unchanged in April. The WGC explained that weekly data suggests previously expired short-term gold/USD swap contracts were settled in April. Currently, only longer-term (1 to 3 months) gold/USD swap contracts remain outstanding.
The Russian central bank continued its selling trend, recording a net sale of 6 tonnes in April. This was its fourth consecutive month of net sales, with year-to-date sales totaling 22 tonnes.
The central bank of Uzbekistan made a small net sale of 1 tonne in April. However, it remains a net buyer for the year-to-date, with cumulative purchases of 24 tonnes, making it the world's second-largest buyer after Poland. Uzbekistan's gold reserves stand at approximately 414 tonnes, constituting about 88% of its total reserves.
Slower Buying Pace and Absent ETF Flows Pressure Gold Price
Despite central banks resuming their net buying, market sentiment towards gold's near-term prospects remains cautious. Goldman Sachs points out that current central bank buying is significantly weaker compared to last year's robust activity. Meanwhile, ETF holdings, which contributed substantially to gold's rally last year, are still in decline, as momentum-focused liquidity has moved into technology sectors like semiconductors and memory.
At the same time, the U.S. economy has shown unexpected resilience amid high oil prices, while U.S. Treasury yields and the dollar continue to strengthen. Market positioning also appears unfavorable, creating clear challenges for gold's upward trajectory. WGC data suggests the market is currently more focused on these near-term headwinds for gold rather than its long-term structural support narrative.
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