Fearless gold prices hit a new high in history! Global central banks accelerate gold purchases in the third quarter.

Global central banks accelerated their purchases of gold in the third quarter, with some re-entering buyers showing no fear of record high prices and betting on gold as a hedge against a weakening US dollar. According to a report from the World Gold Council, the purchase volume of 220 tons from July to September increased by 28% compared to the previous quarter, reversing the slowing trend earlier in the year. The National Bank of Kazakhstan was the largest single buyer, while the Brazilian central bank made its first gold purchase in over four years. By the end of September, central banks around the world had added 634 tons of gold reserves in the year, which is lower than the same period in the past three years but significantly higher than the average before 2022 (the Russia-Ukraine conflict). The World Gold Council predicts an annual purchase volume between 750 and 900 tons by the end of 2025. Central bank gold purchasing activities are accelerating "The escalating geopolitical tensions, persistent inflation pressures, and uncertainty in global trade policy have all boosted demand for safe-haven assets," said Louise Street, senior market analyst at the World Gold Council, in a statement accompanying the report released on Thursday. Although there has been a recent pullback, gold has risen by about 50% this year, reaching a historic high of over $4380 per ounce earlier this month. Part of the driving force behind this strong rally comes from central bank purchases and actions taken by mainstream investors to protect their portfolios from risk. The World Gold Council stated that the soaring prices may have been a "potential limiting factor" for purchases in the first half of the year, and the rebound in demand in the third quarter "proves that central banks are still strategically increasing their gold holdings." The council also estimated that 66% of the demand in the latest quarter has not been reported. The World Gold Council noted that due to fears of missing out on further increases, demand for gold bars increased by 13% from the previous quarter, and the attractiveness of gold as a safe haven and hedging tool is strengthening. The council believes that this trend will continue for the remainder of the year. The report also added that gold-backed exchange-traded funds (ETFs) set a record in the third quarter, with global inflows reaching $26 billion. The World Gold Council stated that expectations of further monetary easing and concerns about the health of the US economy also drove participants to turn to gold in this quarter. The Federal Reserve implemented a widely expected 25 basis point rate cut on Wednesday, but Fed Chair Powell stated that another rate cut in December is not set in stone. Meanwhile, the high gold prices pushed jewelry consumption in the third quarter to its lowest level since 2020, prompting the World Gold Council to lower its expectations for the year. Nevertheless, due to the price rally, jewelry consumer spending increased by 13% year-on-year, reaching $41 billion.