Central banks’ appetite for buying gold remained robust in July, as global reserves increased by a net 37 tonnes, the World Gold Council (WGC) reported.
The net increase in July was below the 64-tonne rise recorded in June. However, added to the 270 tonnes of net purchases by central banks over the first six months of the year, this pushes the year-to-date central bank demand towards the 300-tonne mark, said Krishan Gopaul, senior analyst for Europe, the Middle East and Africa at WGC.
“Few central banks were active during the month, but those that were, acted with purpose,” Mr Gopaul said.
Qatar Central Bank was the largest buyer of bullion, adding 15 tonnes of gold to its official reserves in July. The addition appears to be the largest monthly increase on record, which dates back to 1967.
The central bank’s gold reserves now stand at 72 tonnes, 10 per cent of total reserves, the highest on record in terms of tonnage.
The Reserve Bank of India, a regular buyer of gold, added more than 13 tonnes to its reserves, its highest monthly purchase since September last year, when it bought 19 tonnes.
The July buying has lifted its total gold reserves to 781 tonnes, up by 27 tonnes since the beginning of the year, the WGC said.
Turkey's central bank increased official gold reserves by 12 tonnes in July, broadly in line with the monthly average so far this year, and takes year-to-date gold purchases to 75 tonnes.
The Central Bank of Uzbekistan bought a further nine tonnes of gold in July, the same volume it purchased in June. After sales of 25 tonnes in the first three months of the year, net purchases for the year so far total 11 tonnes.
The National Bank of Kazakhstan, however, was the “only notable seller”, selling 11 tonnes in July and bringing its net sales this year to a little under 30 tonnes, Mr Gopaul said, citing official data.
Demand for gold has remained strong amid global geopolitical uncertainties and a weakening economic outlook.
Net buying by central banks boosted global reserves by 180 tonnes in the second quarter, with Turkey becoming the biggest buyer.
Meanwhile, a small number of central banks were responsible for the vast majority of purchases made during first six months of the year. Turkey and Egypt were the biggest net buyers of gold in the January-June period.
“H1 net purchases of 270 tonnes are virtually in line with the five-year H1 average of 266 tonnes, illustrating the strength of buying amid global instability,” WGC said in its first-half report.
In June, the Central Bank of Iraq said that it had bought about 34 tonnes of gold during the month — its first significant purchase since September 2018 — lifting its gold reserves to a little more than 130 tonnes, the WGC said at the time.
Global gold-backed exchange-traded funds (ETFs) recorded net outflows of $4.5 billion in July, as continued US dollar strength and softer inflation expectations weighed on investment activity, the WGC said in August.
North American and European funds accounted for a major share of the outflows, while gold holdings in China increased.
Though this was the third consecutive month of outflows from global gold ETFs and the largest monthly outflow since March 2021, total holdings remain 5 per cent higher so far this year, at 3,708 tonnes worth $209bn, the WGC said at the time.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
More on Quran memorisation:
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The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
ESSENTIALS
The flights
Fly Etihad or Emirates from the UAE to Moscow from 2,763 return per person return including taxes.
Where to stay
Trips on the Golden Eagle Trans-Siberian cost from US$16,995 (Dh62,414) per person, based on two sharing.
The%20specs
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THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
THURSDAY'S FIXTURES
4pm Maratha Arabians v Northern Warriors
6.15pm Deccan Gladiators v Pune Devils
8.30pm Delhi Bulls v Bangla Tigers
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The Vile
Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5