HOW VENEZUELA IS AFFECTING THE GOLD MARKET
Global central banks continued to be buyers of gold in the first half of 2016, and while the pace of purchases is expected to slow, demand is likely to hold steady.
“There is still no appetite for sales, but outside of Russia and China, few purchases either,” analysts at Macquarie Capital Markets said on Tuesday.
They estimate central banks bought 166 tonnes of gold and sold 22 tonnes in the first half of the year, producing a net purchase of 144 tonnes.
While this figure is in line with what was seen in both 2013 and 2014, it is behind the 179 tonnes that had been purchased at the same point in 2015.
Macquarie noted that its calculations for 2015 and 2016 exclude Venezuela, where gold reserves declined in the first half of this year and dipped 59 tonnes in the same period during 2015. That is because it is unknown whether the country’s central bank engaged in gold sales or swaps, the latter being something Venezuela has been reported doing and has been active in for decades.
If the analysts were to include Venezuela, the numbers would change significantly: the net purchase estimate for the first half of 2016 would be just 66 tonnes, and 120 tonnes in the first half of 2015.