Central Banks Overestimated Gold Buys at Start of Year

Central banks bought significantly less gold at the start of this year than previously thought. According to the World Gold Council, they acquired only 57 tonnes in the first quarter, which is 187 tonnes less than initially estimated.

This is the weakest opening to a year for central bank purchases in over a decade, based on WGC data. The original estimate had suggested that institutions were returning to the market to buy gold after prices dropped from an all-time high. However, since then, the metal has lost around a quarter of its value.

The decline was attributed to higher energy costs and inflation concerns, which pushed back expectations for interest-rate cuts. Nevertheless, central bank demand rebounded sharply between April and June, with a record net purchase of 289 tonnes in that period.