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Due to the crisis, the precious metal has risen to an all-time high this year. Therefore, some central banks profited.
Gold has once again lived up to its reputation as a safe haven. Already at the beginning of the year. When the crisis between Iran and the US broke out in January, investors around the world fled to the precious metal and helped it reach a seven-year high in dollars. In July, the price of gold finally reached a new all-time high in dollars. In euros, the price of gold had already reached an all-time high in January. All this is now in vain. The price of gold has drifted far from its January level due to the crown. And upwards.
For one troy ounce (31.3 grams), investors now have to put about 1,600 euros or $ 1,870 on the table. Meanwhile, there was even more. In August, the price rose to a new record in dollars (over $ 2,000) and in euros. After that, however, the air ran out and the price dropped again. Between July and September, global gold demand fell 19 percent compared to the same period a year earlier, bringing it to the lowest quarterly value since the third quarter of 2009.
Central banks were also extremely cautious during this period. Since 2011, they have continuously appeared on the market as buyers. But in the third quarter of this year, there were net sales for the first time in about ten years. However, the downside was only twelve tonnes, as some central banks, such as those in the United Arab Emirates or Qatar, also bought. Sellers included Turkey with 22 tons of gold and Uzbekistan with 35 tons.
The matter seems clear to Turkey: the country’s currency is currently under enormous devaluation pressure, the lira is falling from a record low to the next, so the central bank should try to counter this. However, so far it has not succeeded. But what also needs to be said about it: Turkey has been one of the biggest buyers of gold since the beginning of the year. The central bank’s holdings now amount to around 560 tonnes, accounting for almost half of reserves. The central bank has also been the sole buyer of domestic gold production since 2017, which will not change this year either. The central bank sold at a good price given its recent situation. The price of gold is unlikely to fall drastically at the moment, but could face headwinds due to the strength of the dollar.
