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(Kitco News) – For the second consecutive month, central banks were net sellers of gold in February, according to the latest report from the World Gold Council.

In a report on Tuesday, the WGC said that, overall, six tonnes of gold were taken out of official reserves in February, with activity dominated by just a few central banks.

“Despite a cumulative decline of 18t year-to-date, global gold reserves remain above 35,600t – their highest level since 1990,” the analysts said in the report.

The WGC said Uzbekistan was the biggest seller in February. It cut its gold reserves by 22 tonnes to 339 tonnes – the lowest level of its gold holdings since December 2020. However, the WGC said the precious metal still represents a significant part of the central bank’s reserves .

“Even after the sale in February, gold reserves still represent 59% of total reserves,” analysts said.

Other central bank sellers included Kazakhstan, which sold another 5 tonnes in February, following a January sale of 17 tonnes. Qatar sold 6 tonnes of gold in February, Mongolia one tonne and Germany one tonne; however, the WGC speculated that the sale of Germany was related to the minting of coins.

The report said Turkey led the market on the buyer side, adding 25 tonnes to its gold reserves in February. The WGC said Turkey had increased its gold reserves by 35 tonnes so far this year, which represents 27% of total reserves. Meanwhile, India purchased 2.6 tonnes of gold in February, bringing its total gold holdings to 758 tonnes. Meanwhile, Ireland, the only active buyer in the developed market, added a ton of gold to its reserves.

Although central banks were net sellers of gold in the first two months of 2022, WGC analysts said they expect central banks to eventually be net buyers of gold.

According to many economists and market analysts, the focus is on central bank reserves. Russia’s war with Ukraine has created significant geopolitical uncertainty, causing some countries to question the role of the US dollar as a global reserve currency.

Many analysts have said that long-term gold remains an attractive asset for central banks looking to diversify away from the US dollar. However, some economists have said it will be decades before the US dollar loses its dominant status, as it currently accounts for around 60% of global reserves.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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