- | 4:19 pm
RBI joins other central banks in stocking up on gold
Global central banks bought a net 19 tons in February, marking the ninth straight month of gains, WGC data showed
The Reserve Bank of India (RBI) joined other global central banks in stocking up on gold in February amid a surge in prices of the yellow metal.
India’s central bank added 6 tons of the precious metal in February, weekly data showed, lifting its purchases of gold during the year to 13 tons and its overall gold holdings to 817 tons.
Global central banks bought a net 19 tons in February, marking the ninth straight month of gains, according to the World Gold Council (WGC). However, February’s net increase was 58% less than January’s 45 tons amid fewer central bank purchases and more sales.
During January and February, central banks added a net 64 tons, 43% lower than a year ago but a fourfold increase when compared with the same period in 2022.
The People’s Bank of China (PBoC) was the largest gold buyer in February, increasing its reserves by 12 tons to 2,257 tons. PBoC’s gold reserves have risen for 16 consecutive months, although gold’s share of total reserves remains around 4%.
Kazakhstan’s central bank also added as much gold as India did during February, boosting its overall reserves of the metal to 306 tons.
There were only two notable sellers during the month, data showed, with Central Bank of Uzbekistan cutting its reserves by 12 tons and the Central Bank of Jordan lowering its holdings by 4 tons.
Central banks are accumulating gold despite rising prices reducing consumer demand, although investments in the metal have increased.
Gold set a fresh record above $2,350 an ounce on Monday, 8 April, before paring gains as investors shifted focus to a key US inflation reading later this week, Bloomberg reported.
Indian gold exchange-traded funds (ETFs) saw inflows of $120 million in February, the strongest monthly inflow for six months, data from the Association of Mutual Funds of India (Amfi) showed.
“During the general election between April and June, there will be enhanced surveillance on the movement of gold and cash, with the demand for gold jewelry expected to stay low even as prices might soften,” Kavita Chacko, the World Gold Council’s research head for India, said in a note last month.
Simultaneously, the prospect of higher prices could spur greater interest in investments tied to gold financial products, Chacko said.