Central Banks' Ongoing Gold Buying Fuels Price Rise
Central bank buying continues to support gold prices, according to ING's Warren Patterson and Ewa Manthey. Despite a slower pace than last year, emerging market central banks remain major buyers, with China and Poland leading the way.
China's central bank has added 20 tonnes of gold to its reserves for 21 consecutive months, while Poland continues to purchase large amounts. The World Gold Council reports that central banks bought a net 23 tonnes in July, maintaining structural demand despite the slowdown.
The price of gold rose over 2% after weaker-than-expected US employment data and comments from Federal Reserve official Christopher Waller suggesting he is open to keeping interest rates steady if inflation behaves. This boost in prices provides additional support for the gold market, which has seen ongoing reserve diversification efforts among emerging economies.