The World Gold Council’s gold reserve data for November is out, showing that global central banks continued to be on a buying spree, and one UK-based research firm expects it to continue, particularily from China. “Buying of gold by global central banks accelerated in November, with China and Russia once again particularly active,” noted Simona Gambarini, commodities economist for Capital Economics. “We expect further official purchases to be one of several factors supporting the price of gold in the next few years.”According to the WGC’s data, 55 tonnes of gold were added to central banks’ reserves in November, up almost 90% from the prior month. “China and Russia were once again the biggest buyers with 21 tonnes and 22 tonnes added to their respective reserves,” she said, adding that the People’s Bank of China (PBoC) released data last week that showed 19 tonnes were added in December as well. Gambarini suggested that central banks from developing economies will be the main source of demand from the official sector moving forward. “Indeed, the amount of gold held by the PBOC still only accounts for around 1.7% of its total reserves,” she said. “This is very low by the standards of other central banks, suggesting that there will be more buying to come.”
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