Central banks are expected to remain net buyers of gold in 2021, which may give gold some support.
At present, a number of governments are buying gold to preserve their value. according to the latest news, the central bank of Hungary has tripled the country's gold reserves by buying the most gold in a decade.
The central bank of Hungary said in a statement that its gold holdings increased to 94.5 tons last month. At the same time, according to the latest data from the World Gold Council, a number of central banks around the world turned to net buyers of gold in February, with India being the largest buyer, with 11.2 tons.
Central banks have supported gold prices for most of the past decade, but in the third quarter of last year, as investment demand rose and gold prices soared, some gold-producing countries made huge profits and central banks became net sellers of gold.
Now, as gold ETF positions have shrunk for months, the gold market is looking elsewhere for support.
Hungary is not the only net buyer of gold now. Adam Glapinski (Adam Glapinski), governor of the Polish central bank, said last month that the bank would buy at least 100 tons of gold in the next few years to demonstrate Poland's economic strength. Serbia has also been steadily buying gold on a small scale since the beginning of 2019.
On a monthly basis, Hungary will buy the most gold since June 2019, while Poland has bought 94.9 tons of gold, according to the World Gold Council. Crishan Gopolo (Krishan Gopaul), market intelligence manager at the World Gold Council, said:
"We expect central banks to remain net buyers of gold in 2021, but in the near term, central bank demand is more balanced."
