Central Banks of China and Poland Added More Gold To Their Reserves
Central banks are backing their bullish gold surveys with real purchases, with China and Poland led the buying in June. Lower prices offered attractive entry points for the banks.
Almost half of central banks worlwide are signaling their faith in gold, and the latest reserve figures confirm they are putting real money behind that conviction.
Two separate surveys released last month already painted a striking picture in itself. WGC (World Gold Council) found that almost half of worldwide central banks intend to expand their gold holdings over the coming twelve months. In May, net official sector gold purchases totaled 41 tonnes, extending the pattern of natural demand from the central banks. As gold corrected lower last month, some of the largest buyers doubled down even further.
China's central bank acquired 15 tonnes of gold last month, marking its twentieth straight month of accumulation and its biggest gold reserve increase this year.
Across the continent, another country, Poland, has even been more bullish on gold. The National Bank of Poland amassed 82 tonnes in the first six months of the year. The bank governor, Adam Glapiński, publicly stated the institution is exploiting the price dip to reinforce its reserves. Gold spot price today on July 10th has closed at slightly above $4,100 per ounce.
This stands in stark opposition as compared to retail investor behavior. Retail traders have exited gold positions to chase the hype in AI equities, and many investors have lost faith in gold price actions as of the recent months.
The divergence raises an important question: when will investors begin following the roadmap central banks are drawing? Well, sovereign buyers aren't purchasing much gold because apparently they predict a worse inflation report next month or because they anticipate near-term rate cuts from the Federal Reserve.
On the other hands, the bankers aren't trading short-term price swings. Reserve managers think in long term, weighing geopolitical stability, currency risk, and an increasingly multi polar monetary order where gold should become more uniquely valuable in the long run.
That is precisely why lower prices haven't dampened official demand. If anything, cheaper gold has merely given central banks with a more favorable buying window.
And even though gold prices have not been very favorable to traders recently, gold COMEX supply inventory has been steadily going lower, with over 5% decrease in the past month alone.
Related assets: Gold, Silver, Palladium, Platinum