1103909 SIP myths you must know!

During the past year, despite fluctuations in gold prices, central banks around the world consistently bought gold every month, increasing their gold reserves. However, during April, 2023, when the price of gold mostly remained above $2,000, central banks worldwide became net sellers of gold. In other words, seeing the high prices, central banks reduced their gold purchases and increased selling. According to the World Gold Council, central banks worldwide sold a net total of 71 tons of gold during April.

While some banks, like those in China and Poland, purchased gold for their reserves. Led by  central banks of Turkey and Kazakhstan, central banks became net sellers of gold during April. Turkey’s central bank sold 81 tons and Kazakhstan’s central bank sold 13 tons of gold in April.

Apart from Turkey, the buying and selling trends of central banks in other countries were normal. The reason behind Turkey’s significant selling is that its government imposed ban on gold imports there. Despite the import ban, considering the demand for gold in the market, Turkey’s central bank had to sell gold from its reserves. Apart from this, there isn’t any major reason for central banks to sell huge chunks of the yellow metal. However, it is important to see whether Turkey’s central bank increases its selling in the coming months or not.

On the other hand, there hasn’t been a significant change in the buying and selling trends of other central banks worldwide. China’s central bank continued its gold purchases consistently for the sixth straight month in April. The World Gold Council believes that the trend of central banks’ gold purchases may continue in the coming months. Central banks remained net buyers of gold throughout 2022 and may also in 2023. If the World Bank’s estimate is accurate, this could work in favour of gold prices.