Central banks sell gold for first time in a decade

Bloomberg/Eddie Spence/10-28-2020

“Central banks became gold sellers for the first time since 2010 as some producing nations exploited near-record prices to soften the blow from the coronavirus pandemic. Net sales totaled 12.1 tons of bullion in the third quarter, compared with purchases of 141.9 tons a year earlier, according to a report by the World Gold Council.”

USAGOLD note: That total of 12.1 tonnes is a very small number in a global market that processes roughly 3000 tonnes per year. In fact, the sellers in the third quarter were two countries that have been big buyers over the past several years – Turkey and Uzbekistan. We agree with WGC lead analyst Louise Street who is quoted in this Bloomberg article as saying: “It’s not surprising that in the circumstances banks might look to their gold reserves. Virtually all of the selling is from banks who buy from domestic sources taking advantage of the high gold price at a time when they are fiscally stretched.”