Global Central Banks Extend Gold Buying Streak to 23 Months

Central banks across the globe continued their gold accumulation in February, marking the 23rd consecutive month of net purchases, according to an analysis by The Kobeissi Letter. These institutions collectively added 19 tonnes of gold during the month, following a 6-tonne increase in January. Year-to-date acquisitions now total 25 tonnes.

The National Bank of Poland emerged as the largest buyer in February, adding 20 tonnes to its reserves. This brought Poland's total gold holdings to 570 tonnes, representing approximately 31% of its total foreign exchange reserves. Uzbekistan also made significant additions, with the Central Bank of Uzbekistan increasing its reserves by 8 tonnes to reach 407 tonnes, or 88% of its FX holdings.

China continued its steady accumulation trend, purchasing 1 tonne in February. This marks the 16th consecutive month of Chinese gold buying, bringing its total reserves to 2,308 tonnes, or about 10% of its foreign exchange holdings.

However, not all central banks increased their holdings during this period. Turkey and Russia saw the largest declines in February, with reductions of 8 tonnes and 6 tonnes respectively. Turkey reportedly sold an estimated 120 tonnes in March to fund foreign exchange operations amid regional tensions.

Despite these fluctuations, overall demand from central banks remains robust. Gold prices steadied near $4,715 an ounce after two sessions of gains, as traders assessed diplomatic developments regarding regional conflicts. The White House indicated plans for direct talks with Iran, while Tehran accused Israel of violating ceasefire agreements with strikes in Lebanon.

Analysts at Standard Chartered noted that gold's role as a liquidity provider remains prominent in the current environment. They described the recovery as fragile in the short term but suggested that physical demand could provide stronger support for bullion prices going forward.