(LONDON) – Central banks cut gold purchases to their lowest first quarter level in more than 15 years, reducing one of the main forces that supported the precious metal’s record price rise over the past four years.
Data from the World Gold Council (WGC), cited by the Financial Times, showed central banks bought significantly less gold than previously estimated during the first quarter of the year.
The revised figures reduced estimated central bank gold purchases from 244 tonnes to just 57 tonnes, marking the weakest first quarter performance in more than 15 years.
Central bank buying had become one of the biggest drivers of global gold demand, helping push prices to record highs earlier this year. However, the market has become increasingly difficult to assess as some major buyers, including China, disclose only part of their gold purchases.
The slowdown in official gold buying is expected to affect prices, which have already fallen by nearly 30% from their January peak.
Despite weaker central bank demand, total global gold demand remained relatively strong. WGC data showed demand reached about 2,522 tonnes during the first half of the year, around 2% higher than the same period last year.
Gold prices fell below $4,000 per ounce on 24 June for the first time since November, pressured by a stronger US dollar and expectations of higher US interest rates.