Central Banks Fuel Gold Market Despite Slower Pace

Central banks around the world continued to accumulate gold reserves in July, led by China and Poland, according to data from the World Gold Council. The two countries, along with other emerging market central banks, purchased a total of 23 tonnes of gold last month, extending a trend that has been seen throughout the year.

This increase in official demand is a key driver of support for the gold market, despite a slower pace than last year's record highs. Emerging economies are increasingly turning to gold as a safe-haven asset and diversification tool, with ongoing reserve diversification efforts expected to sustain structural demand even if purchases moderate from recent levels.

The price of gold rose over 2% on Thursday following weaker-than-expected US employment data and comments from Federal Reserve official Christopher Waller suggesting openness to keeping interest rates steady at the next FOMC meeting, assuming inflation remains under control.