Central banks continue to buy yellow metal despite the rising price

Mumbai: rising gold prices have not deterred the central banks to buy the precious metal while resuming shopping in August, thereby maintaining the recent trend of diversification of the foreign regaves outside the American debts.

Worldwide central banks added a net 15 tons of gold reserves in August, compiled by the World Gold Council using data from the International Monetary Fund and the respective central banks.

In August, the National Bank of Kazakhstan was the largest gold buyer in the month, while the reserve Bank of India did not buy for the second month in a row.

In fact, the Central Bank of India only bought gold in three of the first eight months of 2025, compared to nearly-consistent monthly additions that were seen in 2024. The cumulative purchases of RBI were at 3.8 tons between January and August 2025, against 45.4 tons in the same period last year, WGC said.

RBI’s gold -containing it was 879.98 tons on August 29.

The last data showed that the gold on 26 September 13.6% of the Forex reserves of the RBI formed compared to 9.3% a year ago, when the total reserves had risen to a record high. Maintains trendline
The total number of August, said WGC, was in line with monthly net purchases by global central banks between March and June. It also indicates a return to purchase form after the global reserves were unchanged in July. The number before July, previously estimated at more than 10 tons, was revised down after Bank Indonesia reported a sale of 11 tons.

Gold prices hit $ 3,429/OZ on 31 August, an increase of 31% JoJ.

WGC said that the recent Gold Price Rally, which has reached several new all time this year, will probably remain a limitation for the level of buying by central banks. It can also be a factor in more tactical sale.

“But the recent delay in buying does not necessarily mean that central banks as a whole lose interest in gold,” it added.

According to Madhavankutty G, chief economist at Canara Bank, there is more visibility on the route of the Fed Rate with even more cuts. Of course the question will be shown, although this correlation is weakened by earlier trends.

“Worldwide uncertainties are also not Ebly, which supports gold. Moreover, we must bear in mind that the amount of gold mined is limited, while demand remains stable. So central banks will benefit from a further increase in gold prices that will reinforce their reserves,” he added.