Why are the gold purchases of central banks down? High prices, geopolitics weighing; Trend to go intact from the American assets – The Times of India

After they have bought aggressive gold in the past year, central banks around the world have now delayed their purchases of yellow metal. Gold -acquisitions of the Central Bank have fallen compared to last year, which indicates a more measured attitude in the midst of global political tensions and high gold prices. Nevertheless, experts suggest that the continuous shift of American assets for reserve diversification will continue.July 2025 figures show a reduction of 70% compared to the previous year. During the first six months (H1) of 2025, Central Banks acquired 123 tonnes, slightly less than the 130 tons purchased during the corresponding period last year.

Why delay central banks gold purchases?

The escalating gold prices, which reach unprecedented levels last week, contributed to the delay of gold purchases. While central banks retain strategic gold acquisitions, price sensitivity influences their purchasing decisions. Currently almost $ 3,600 per ounce fluctuate in international spot gold prizes.The World Gold Council was quoted in an ET report: “Global Central Banks bought Netto 10 tons in July based on reported data, a moderate net allocation compared to previous months. Despite this slower pace of Netto -Kopen, central banks of Gold remain, even in the current prize class, even in the current prize class.”

Share of gold in total reserves

Madhavankutty G, head economist at Canara Bank, noted: “If geopolitical issues become favorable, prices can fall, which would be a more suitable time to increase gold shares. The reserve Bank of India (RBI) also follows a similar pattern, apparently it would be the goldbells of geoppangs.According to Madhavankutty, a possible relaxation of India-US trade stresses can lead to lower gold prices, so that additional opportunities for gold acquisition can be created.“Also, if USD further weakens, it is again favorable because the prices would weaken. So the break in July is more a risk management movement instead of reducing the gold supply,” he said.The Gold reserves of the RBI remained unchanged in July, after a small increase of 0.4 tons in June. In the first seven months of the year, an addition of 4 tons to its reserves, considerably lower than the 40 tons that was acquired in the corresponding period in 2024, notes Kavita Chacko, India Research House on WGC. “Despite the delay, RBI’s Gold Holdings will remain at a record high of 880 tons,” she said in a note of 20 August.