Central banks are stepping up their gold purchases

Rio de Janeiro (Aug 16)  Recently it was reported that Brazil's central bank purchased over 62 tons of gold. It was not only the fact that these purchases were made that was the key, it was also the speed. Gold telegraph noted that the 62 tons were bought over a three-month period. This now puts the national reserves at 130 tons.

In addition to this, central banks purchased 333.2 tons, an increase of 39% over the 5-year average in the first half, and about 199.9 tons during Q2. The largest purchases were recorded in Thailand & Hungary (including Brazil), with an increase of 214 tons.

Data from the WGC noted, global demand for jewelry in H1 recorded 873.7 tons, 17% lower than the 2019 average, improving during Q2, reaching 390.7 tons, year-on-year, an increase of 60%.

Egypt's demand jumped by 58.5%, or 14.9 tons, during the H1 of 2021, compared to 9.4 tons, year-on-year. The data showed that the demand for gold jewelry in Egypt increased during H1 2021 to 13.6 tons, an increase of 58%, compared to 8.6 tons (YOY). The volume of demand for gold bullion bars and gold coins rose to 1.2 tons, or 33.3%, compared to a value of 0.9 tons during the same period last year.

The numbers are quite tricky as the global demand decreased in total in the first half of the year by 11% of the year 2020 to reach 1833.1 tons but there was a reduction in the second quarter of 2021 by 1% on an annual basis to 955.1 tons. Also, the total global demand decreased by 1%, on an annual basis, in Q2 of 2021 to 955.1 tons.

The total global demand for bullion and gold coins amounted to 594.5 tons in H1 of 2021, the strongest since 2013. Demand reached 243.8 tons in Q2, an increase of 56%, year-on-year; the best quarter since 2013.

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