The biggest buyers of gold aren't buying like they used to
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Central banks bought an estimated 166 tonnes of gold and sold 22 tonnes in the first half of 2016, making a net purchase of 144 tonnes, according to Macquarie analysts.This was not much changed from the net purchases they made in 2013 and 2014, but less than the 179 tonnes they bought at the same time last year, Matthew Turner and his team wrote in a note this week. Advertisement
"There is still no appetite for sales, but outside of Russia and China few purchasers either," Turner wrote. "The outlook is for lower but still substantive net purchases."
Macquarie noted that Venezuela's gold buying is a big caveat.Amid an economic and debt crisis, Venezuela swapped and sold its gold reserves to raise money, sending its stockpiles to a record low, according to the FT.
Central banks buy gold to diversify their reserves. And because they own massive stockpiles of gold, investors watch central-bank buying and selling to gauge sentiment towards the precious metal.
On Wednesday, gold futures fell 1%, or $14.35 an ounce, to $1,331.75 amid a sell-off across precious metals.