Central Banks Snapping Up Gold at Near-Record Pace
Central banks and other institutions boosted gold purchases to the second-highest level on record in the quarter to September as countries including China and Russia sought to diversify their foreign-exchange reserves.
Net purchases were 175 metric tons, nearing the record 179.5 tons in the same quarter a year earlier, and up from 127.9 tons in the preceding three-month period, the World Gold Council said in a report on Thursday. Still, over the first nine months central banks’ net purchases dropped 6.7 percent to 425.8 tons, according to the council.
Russia, China and Kazakhstan are among states buying bullion this year, helping to support prices that are headed for a third annual loss. Central banks will probably remain net buyers as emerging-market institutions continue to boost their allocation, while developed countries are reluctant to sell, Barclays Plc said in an Oct. 21 report.
“Diversification of reserve assets, especially among developing nations, remains the primary motivation for this increase in official gold reserves, as many recognize that the economic and geopolitical outlook continues to look far from certain,” the council said.
In July, the People’s Bank of China ended six years of mystery surrounding its reserves, revealing a 57 percent jump in gold assets since 2009 to about 1,658 tons. Asia’s largest economy, which rivals India as the biggest gold consumer, has been increasing holdings monthly since then and may have addeda further 14 tons in October.