Gold prices retreated on Tuesday after approaching a four-week high earlier in the day. The pullback followed a modest dollar recovery and investor profit-taking, especially as uncertainty around U.S. trade policies kept markets cautious.
Global gold purchases by central banks declined in April, according to the latest report from the World Gold Council (WGC). The data shows that central banks added a net 12 tonnes of gold to their reserves during the month. This volume marks a 12% drop from March’s figures and falls significantly below the 12-month average of 28 tonnes. The April figures also reflect the second consecutive month of slowing net accumulation. Analysts attribute the dip to the sharp rise in gold prices observed since the beginning of 2024, as the precious metal continues to hit multiple record highs.
Gold Prices Impact Central Bank Purchases
The rising price of gold may be acting as a deterrent to aggressive central bank buying. Analysts suggest that the high valuation of the metal has prompted central banks to moderate their purchases. The WGC acknowledged the slowdown but emphasized that “we still expect overall buying to continue, given that the economic and geopolitical outlook remains highly uncertain.” Central banks typically increase gold reserves to hedge against inflation, currency volatility, and global instability. Despite the slower pace, some banks remain active participants in the market, continuing to expand their gold holdings to strengthen reserve portfolios.
Poland Leads Global Gold Buying In April And 2025 YTD
The National Bank of Poland remained the largest gold buyer both in April and for the year-to-date, according to the WGC data. Poland has significantly expanded its gold reserves in recent years as part of its strategy to enhance financial stability. In contrast, the Reserve Bank of India left its gold holdings unchanged at 880 tonnes. However, it did provide an update on its gold storage arrangements, reflecting ongoing interest in managing reserve assets strategically. Central banks vary in their buying strategies, with some opting for gradual accumulation while others assess market conditions before making large purchases.
African Central Banks Eye Increased Gold Reserves
Several central banks across Africa have signaled their intent to build or increase their gold reserves. The Bank of Namibia, in early May, announced plans to raise gold reserves to 3% of total holdings. Similarly, the National Bank of Rwanda disclosed during April that it would begin accumulating gold. These developments suggest a broader interest from emerging markets in enhancing reserve diversification. African economies, like many others, are looking to hedge against external shocks and currency risks by turning to gold. These moves come at a time when gold remains a globally recognized store of value.
Gold Prices Pull Back Slightly; India Sees Strong Jewellery Demand
Gold prices retreated on Tuesday after approaching a four-week high earlier in the day. The pullback followed a modest dollar recovery and investor profit-taking, especially as uncertainty around U.S. trade policies kept markets cautious. On the physical demand front, India’s gold jewellery consumption is projected to grow substantially. According to a report by ICRA, demand in fiscal year 2026 is expected to increase by 12–14% in value terms. The strong projection reflects steady consumer interest in gold jewellery, supported by cultural significance and seasonal buying trends across the Indian market.
(With Input From ANI)
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