Friday, November 18, 2011

Central Bank Gold Buying at 40-year High


Originally published at GATA.org

Central Bank Gold Buying at 40-year High

By Jack Farchy
Financial Times, London
Thursday, November 17, 2011

http://www.ft.com/intl/cms/s/0/c0025500-10ef-11e1-a95c-00144feabdc0.html

Central banks made their largest purchases of gold in decades in the third quarter, as a sharp drop in prices in September accelerated the shift to bullion as a means of diversification.

The scale of the buying, at 148.4 tonnes on a net basis, was far bigger than previously disclosed, surprising some traders.

The data were published in a quarterly report by the World Gold Council, a lobby group for the gold industry, on Thursday.

The WGC declined to identify of the central banks behind the majority of the buying citing "confidentiality restrictions," saying only that "a slew of new entrants emerged wishing to bolster gold holdings."

Central banks are one of the most important drivers of the gold market but few disclose details about the changes in their bullion reserves.

Central banks became net buyers of gold last year after two decades of heavy selling -- a reversal that has helped propel the price of bullion to a high of $1,920.30 a troy ounce, up 600 per cent in a decade.

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