by Peter Schiff, Schiff Gold:
After three straight months of net sales, central banks globally became net buyers of gold again in June.
On net, central banks bought 55 tons of gold in June as the Central Bank of Turkey switched from selling back to buying, according to the most recent data compiled by the World Gold Council.
Over the previous three months, Turkey reduced its gold holdings by 160 tons. According to the World Gold Council, this was a specific response to local market dynamics and didn’t likely reflect a change in the Turkish central bank’s long-term gold strategy. “Gold was sold into Turkey’s domestic market to satisfy very strong bar, coin and jewelry demand following a temporary partial ban on gold bullion imports, a WGC report said.
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According to a Reuters report, the Turkish government suspended some gold imports in February in an effort to soften the economic impact of significant earthquakes.
In June, the Central Bank of Turkey flipped back to buying, adding 11 tons of gold to its reserves.
According to the World Gold Council, “The bank’s activity underlined and clarified the continuing trend in central bank gold demand.”
The People’s Bank of China was the largest gold buyer in June, adding 21 tons to its gold reserves. It was the eighth consecutive month of buying for the Chinese central bank. Since it began officially reporting increases in November 2022, official Chinese gold reserves have grown by 165 tons.
China has a history of adding to reserves and then going silent.
The People’s Bank of China accumulated 1,448 tons of gold between 2002 and 2019, and then reported nothing for more than two years before resuming reporting last fall.
Many speculate that the Chinese continued to add gold to its holdings off the books during those silent years.
In fact, there has always been speculation that China holds far more gold than it officially reveals. As Jim Rickards pointed out on Mises Daily back in 2015, many people speculate that China keeps several thousand tons of gold “off the books” in a separate entity called the State Administration for Foreign Exchange (SAFE).
Last year, there were large unreported increases in central bank gold holdings. Central banks that often fail to report purchases include China and Russia. Many analysts believe China is the mystery buyer stockpiling gold to minimize exposure to the dollar.
The National Bank of Poland (NBP) was another big gold buyer in June, adding 14 tons to its holdings. It was the third straight month of gold buying for the Polish central bank. Since resuming purchases in April, the NBP has added 48 tons, pushing its total gold holdings to 277 tons.
