Central banks had to sell gold for the first time since 2010. And it was a bow to the producing nations’ exploitation of nearly record prices to soothe the economic blow of the coronavirus pandemic.
As reported by the World Gold Council (WGC), in comparison to the purchases of 141.9tons a year before, the third quarter saw net sales of 12.1tons bullion. The WGC reported that Turkey and Uzbekistan directed the sell. And on the other hand, the central bank of Russia published its first quarterly sale within 13years.
The influx into exchange-traded funds has steered gold’s advance in this year. However, purchasing by central banks has helped in stimulating bullion in the current years.
Nevertheless, due to the economic downturn caused by the global pandemic, many people are also turning to professional gold buyers to secure cash for gold. However, the current surge in gold’s price is serving as a boon, especially for those who have some unwanted gold jewellery lying in the drawer.
Coronavirus Caused this Situation for the First Time
Central banks have never been such net sellers of gold in a decade. According to the lead analyst at World Gold Council, Louise Street, it is no surprise that in such instances, banks will count on their gold reserves. She added –
“Virtually all of the selling is from banks who buy from domestic sources taking advantage of the high gold price at a time when they are fiscally stretched.”
As per the report from the WGC, the central banks of Uzbekistan and Turkey in the third quarter sold 34.5tons and 22.3tons of gold respectively. Gold surged to a record price of more than nearly £1,550 per ounce in August. However, it later declined to about £1,419. Gold’s spot price today (November 25) is £1,376.30 per ounce.
Overall demand for bullion decreased by 19% year-on-year and the lowest was since 2009. While the demand for Indian jewellery reduced by half, Chinese jewellery purchasing was even down.
However, this fall-off in jewellery was somewhat counterbalanced by a 21% increase in demand from the investors. The demand for gold coins and bars increased more. While the mine production remained pacified even after virus restrictions were eased, net gold supply decreased 3% year-on-year.
But the quarterly hike in recycling alleviated the decline, with people cashing in on higher prices.
Gold is considered as a safe-haven asset as it always has an excellent market value, no matter in which form it is. With this in mind, people who are looking for convenient ways to get access to extra cash can choose to sell gold. Whether you sell scrap gold or a broken, tangled gold jewellery piece, it can get you an excellent return.
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