First the good news:according to the latest World Gold Council update, central banks, a key pillar of the bullish case for gold, have returned to adding holdings in April after notable selling in March sent the price of the precious metal tumbling.The 17 ton purchase represents a turnaround from steep sales in March, which at nearly 30 tons were the largest monthly gold sales in years,driven almost entirely by Turkey. Poland remained the top buyer in the month, while China accelerated its pace of purchases.
According to WGC, Poland remained be the top buyer in the month (14t), while China intensified its pace of purchases: its 8t net purchase was the highest since December 2024 and extends its current buying run to 18 consecutive months. The Czech Republic shows similar consistency in purchases, having bought 3t in April, its 38th consecutive monthly purchase. Meanwhile, Russia continues its sales streak this month (6t), with y-t-d sales of 22t.
Reported activity in April and y-t-d was concentrated in:
Now the bad news: according to Goldman, even as the rebound signals a return to sturdy central bank demand, it’s trending at a fraction of last year’s average pace. Meanwhile, the driver of last year's tremendous move higher which pushed gold above $5000, has yet to return: the furious ETF buying that characterized the meltup phase in gold, is not there; in fact, ETFs continue to sell as all momentum-chasing liquidity has landed in such areas as chip and memory stocks.
That underscores that the market is currently more focused on the near-term headwinds for the bullion rather than its structural tailwinds.
Meanwhile, with Treasury yields and the dollar grinding higher as the US economy proves surprisingly resilient in the face of elevated oil prices, and with positioning on the back foot, the path ahead for gold remains challenged.
Source: ZeroHedge News
