France, Russia and Turkey were among 15 central banks who added gold to their foreign exchange reserves in July, IMF data showed today.
Russia expanded their gold reserves for a 10th straight month in July. Russian holdings, the seventh-largest by country, gained another 6.3 metric tons to 1,002.8 tons.
Kazakhstan"s reserves also rose for a 10th straight month to 1.1 tons to about 132 tonnes. Azerbaijan added 2.009 tonnes to bring its holdings to 10.023 tonnes in July.
Turkey lifted its gold holdings by 22.5 tonnes, the biggest increase seen among 15 central banks. Turkey now has the world's 11th-largest gold reserves as its holdings rose to 464 tonnes in July from 441.5 tonnes in June. The country's central bank last year allowed commercial banks to hold a portion of their lira reserves in gold.
France bought 1,000 troy ounces of gold. The Bank of France has made a few such purchases in recent months. Analysts are unsure as to why the French central bank bought the gold but it may have been due to a Bank of France gold coin offering.
Cross Currency Table - (Bloomberg)
Mozambique, Guatemala, Kyrgyz Republic, Kazakhstan and Azerbaijan were some of the other countries who diversified into bullion.
Mexico, Denmark and Canada were among those that sold some gold in small quantities. Mexico reduced its holdings for a 15th month to 123.8 tons, according to the data.
Gold holdings by central banks are keenly watched since they as a group became net buyers in 2010 following two decades of being net sellers.
The global economic crisis since 2008 has led to resurgent official sector interest in gold which seems set to continue for the foreseeable future. Central banks are diversifying their assets amid a mounting, long term, concerns about fiat currencies, particularly in emerging markets.
Demand from central banks and global coin and bar demand is helping to counter the record outflows from ETF products seen this year. Central banks added 534.6 tons to gold reserves in 2012, the most since 1964, and may buy a similar amount again this year.
Gold rose 70% from December 2008 to June 2011 after the Lehman Brothers collapse led to the U.S. Federal Reserve pumping more than $2 trillion into the financial system by purchasing U.S. "risk free" government debt and due to the continuing Eurozone debt crisis. |