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Central Banks Seen Adding Gold Reserves: World Gold Council

According to the World Gold Council, which compiles data of all levels of gold transactions, the Brazilian central bank bought 1.7 tonnes in the quarter, bringing its holding to 35.3 tonnes. The last time it reported an addition to its gold reserves was in June 2005.

Paraguay reported a 7.5-tonne increase, a tenfold rise from 0.7 tonne before the purchase. South Korea also increased its holdings, by 29 per cent in July, purchasing 16 tonnes.

“Diversification of reserve assets remains the driving force behind gold demand by central banks and purchases of a similar order of magnitude are expected for the fourth quarter,” the council said in a report released recently.

“Official-sector demand is likely to act as a fairly solid pillar of demand going forward.”

Gold is now considered a safe haven for central banks, which have booked losses from the continued depreciation of US dollars, which made up 60 per cent of global international reserves.

A source at the Bank of Thailand said recently that the dollar now accounted for about 40 per cent of the Kingdom’s international reserves, with more diverted to the currencies of major trade partners, including the Chinese yuan.

There was no report of Thailand purchasing more gold in the third quarter. As of September, the value of the country’s gold reserves accounted for 5 per cent of its international reserves, which totalled US$183.6 billion (Bt5.63 trillion). At the end of last year, gold reserves were valued at $7.73 billion, which was 4.4 per cent of the international reserves of $175.12 billion. Thailand holds 152 tonnes.

In terms of percentage of a nation’s international reserves, Thailand with 152.4 tonnes in |possession is ranked 25th among 40 countries with reported gold holdings.

The US tops the list with a holding of 8,133.5 tonnes, or 77 per cent, followed by Germany’s 3,395.5 tonnes, or 74 per cent. At the bottom is South Korea, with 70.4 tonnes or 1.3 per cent of reserves.

For 2011, Mexico was the largest net buyer, adding almost 100 tonnes to its gold reserves, followed closely by Russia at about 95 tonnes.

Thailand, South Korea, Bolivia and Venezuela also conducted notable purchases during the course of the year, while Kazakhstan and Tajikistan were among the countries making smaller additions.

Central banks around the world were net purchasers in the year, adding to their overall gold reserves by 440 tonnes, compared with 77 tonnes in 2010.

Via – NationMultimedia [1]

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