Central banks became gold sellers for the first time since 2010 “as some producing nations exploited near-record prices to soften the blow from the coronavirus pandemic.” This according to a recent Bloomberg article.

A report from the World Gold Council (WGC) shows that overall gold demand fell by 19% this year compared to the same period last year, with net gold sales in the third quarter totaling 12.1 tons versus purchases of 141.9 tons in the prior year. The selling was reportedly driven by Uzbekistan and Turkey, while Russia’s central bank posted its first quarterly sale in 13 years.

The article cites comments from WGC lead analyst Louise Street: “It’s not surprising that in the circumstances banks might look to their gold reserves. Virtually all of the selling is from banks who buy from domestic sources taking advantage of the high gold price at a time when they are fiscally stretched.”

Gold prices rose to above $2,075 an ounce in August, a record high, before dropping to around $1,900 per ounce last month. The article reports that total gold supply dipped by 3% compared to last year as mine production remains depressed “even after Covid-19 restrictions were lifted in producers like South Africa.”