[Edaily Reporter Bang Sung Hoon ] Central banks around the world purchased gold at the fastest pace in the third quarter since the end of 2024. They increased their buying even as gold prices were weighed down by high oil prices and high interest rates.

According to Bloomberg, the World Gold Council (WGC) stated in a report released on the 3rd (local time) that central banks made net purchases of 321 metric tons of gold during the three months from July to September. Although the pace of buying was slow earlier this year, this quarter’s purchases brought the year-to-date total to 675 metric tons, slightly exceeding the figure for the same period last year.

Central banks have been the key drivers behind the multi-year rally that pushed gold prices to record highs last January. They continue to serve as a pillar of support for gold prices even amid broader market weakness. Gold prices have fallen by about a quarter since the war in Iran began in late February. This is due to rising expectations of monetary tightening driven by higher energy costs—a negative factor for non-interest-bearing gold.

John Reed, chief market strategist at the WGC, analyzed that the weakness in gold prices during the quarter likely spurred purchases by some central banks. He also explained that for central banks anticipating a weakening U.S. dollar, the recent strength of the dollar may have provided an incentive to shift a portion of their foreign exchange reserves into gold. “We expect the dollar to weaken over the long term, so if their holdings of short-term U.S. Treasuries mature, they may choose to use part of the proceeds from the now-more-expensive dollars to buy gold,” he said.

Nearly two-thirds of the estimated central bank purchases consist of volumes not directly disclosed by the monetary authorities. The consulting firm MetalsFocus calculates these figures on behalf of the WGC by synthesizing publicly available data, trade statistics, and field surveys.

Among the disclosed purchasing countries, China (63 metric tons) and Poland (41 metric tons) bought the most. Russia (19 metric tons) was the only major country to sell.

Gold prices have been on a downward trend in recent months as the war in the Middle East has fueled expectations of higher oil prices and interest rates. The spot price of gold stood at $3,959.24 per ounce the previous day. However, there was a strong inflow of funds into gold exchange-traded funds (ETFs), causing third-quarter holdings to rise by 211 metric tons to a record high.

In contrast, demand for jewelry fell 17% to 313 metric tons, marking the lowest third-quarter figure since records began in 2000. This was due to tax changes in India and China, as well as high gold prices, which led consumers to seek lighter products with lower purity.

In addition, gold mine production rose 3% from a year ago to 1,071 metric tons, marking a record high for the third quarter. Recycled gold fell 8% to 314 metric tons, the lowest level since 2023. Demand for gold bars and coins fell 19% to 268 metric tons, but in China, it rose 7% to 79 metric tons, bringing the year-to-date total to 393 metric tons—a new all-time high.