Gold demand from central banks showed signs of moderating in late 2024 according to fresh analysis from Societe Generale strategists Michael Haigh and Jeremy Sellem, who examined World Gold Council survey data and market flows. The strategists noted that while central bank purchases had been a major supportive factor for gold prices throughout recent years, particularly as nations diversified away from dollar reserves, the pace of official sector buying appears to be slowing. This comes as real yields remain elevated, creating headwinds for the non-yielding precious metal. The analysis suggests central bank accumulation, which had been running at record levels through much of 2022 and 2023, is returning to more normalized historical patterns. This shift coincides with gold trading near record highs above $2,600 per ounce, raising questions about whether prices can sustain current levels without the robust official sector support that helped drive the rally.
FXnCO Insight
Traders should monitor gold’s ability to hold above $2,600 without aggressive central bank buying, as weakening official demand combined with elevated real yields could signal vulnerability for bullion prices.
Source: FXStreet