Central banks continue to provide significant support to the gold market, but data compiled by the World Gold Council shows that buying volumes fell slightly in August. According to the report, only 20 tons of gold were bought in August, down from the 37 tons bought in July.

Turkey, Uzbekistan and Kazakhstan were the three central banks that increased their gold reserves, with Turkey being the biggest buyer. It purchased 9 tons of gold in August, raising its total holdings to 478 tons. That is the highest level since the second quarter of 2020.

Uzbekistan, on the other hand, purchased 8.7 tons of gold for the third month in a row. It has been actively buying the metal after selling 25 tons at the beginning of the year. This year, its gold reserves increased by 19 tons.

As for Kazakhstan , it bought 2 tons of gold in August after selling 11 tons in July. Its gold reserves currently amount to almost 375 tons.

The WGC also noted that Qatar was potentially buying gold in August. But unidentified forces in the physical market are holding back demand, so buying could be more significant than the numbers suggest.

Considering that there is a gap between the physical gold market and paper futures, the undisclosed demand from other central banks may explain why the physical market is so tight.

There are also suspicions that China is increasing its gold reserves without reporting it as its gold bars continue to rise even despite the increase in gold imports into the country.

Trade data from the Swiss Federal Customs Administration has indicated that China imported 5.7 tons of gold from Switzerland in August, the largest shipment since April 2020.