Gold continues to play a significant role in the reserves of central banks. According to the International Monetary Fund and the World Gold Council, countries all over the world continue to ramp up purchases of the metal.
WGC Senior Analyst Krishan Gopaul reported that Qatar purchased 1.6 tons of gold in June, the first increase in the country's gold reserves since October 2022. Currently, Qatar's central bank holds 93.4 tons of gold in its currency reserves.
On the other hand, the National Bank of Kazakhstan sold 3.2 tons of gold in june, reducing its gold reserves by 42.1 tons since February. It purchased 3.9 tons of gold back in january, but Gopaul said countries with domestic gold production usually sell their gold.
Nevertheless, almost all countries bought gold in June, with China and Poland leading the market. Although Turkey sold their stock of the metal in the past three months before June, distorting the global picture, the country bought 11 tons of gold in the past month.
Central banks continue to buy gold as it remains a neutral asset. Governments worldwide, led by western countries, do this to increase their growing deficits, creating sovereign risks in the market.
It also makes sense to hold gold in the current situation as the precious metal remain independent from geopolitical risk, as well as risks for third parties.