In April, central banks continued to increase their gold reserves, but at a notably slower pace as prices neared historic highs. According to the World Gold Council, net gold purchases amounted to 12 tonnes—12% less than March and well below the 12-month average of 28 tonnes. This marks the second consecutive month of deceleration in central bank gold accumulation.
Gold prices have surged approximately 27% year-to-date, reaching an unprecedented peak of $3,500 per ounce in April. This rally has been fueled by escalating global trade tensions, geopolitical uncertainties, and ongoing reserve diversification efforts by central banks. In the first quarter of 2024 alone, central banks acquired 244 tonnes of gold.
Poland has emerged as the most aggressive buyer this year, continuing its trend in April by adding 12 tonnes to its holdings. The National Bank of Poland now holds 509 tonnes, surpassing the European Central Bank’s reserves of 507 tonnes.
Despite the recent slowdown, experts anticipate central banks will maintain gold purchases amid ongoing economic volatility and strategic moves to reduce dependency on the US dollar.
OPEC Boosts Output in May Amid Market Tightness and Alberta Wildfires
Oil prices gained momentum in late May, with ICE Brent crude reaching near $66 per barrel—the highest since mid-May. Prices received a temporary boost from wildfires in Alberta, Canada, even as the market adjusts to OPEC+’s planned supply increase in July. Signs of supply tightness persist as demand rises with the approach of the Northern Hemisphere summer, evident in the strengthening Brent and WTI prompt timespreads and deep backwardation in trading.
Rainfall has eased immediate concerns over Alberta wildfire disruptions. Canadian Natural Resources resumed operations at a previously shut site. However, forecasts predict drier, warmer conditions later this week, potentially threatening renewed supply risks.
Preliminary data from a Bloomberg survey indicate OPEC production rose by 200,000 barrels per day (b/d) month-on-month to 27.54 million b/d in May. This increase fell short of OPEC’s 300,000 b/d share of the total 411,000 b/d OPEC+ production hike, partly due to some members producing above quotas while others, including Saudi Arabia, underperformed. Following substantial planned supply boosts in June and July, OPEC’s output is expected to continue rising in the near term.
Meanwhile, the American Petroleum Institute reported a 3.28 million barrel decline in US crude inventories last week. However, crude stocks at the Cushing hub rose by 952,000 barrels, and gasoline and distillate inventories expanded by 4.73 million and 761,000 barrels respectively, reflecting a mixed inventory picture overall.
