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Published on International Business Times (http://www.ibtimes.com)
Central Bank Gold Demand Still
On Track To Hit Highest Level Since 1964; Despite Q3 Dip
By Moran Zhang
| November
15 2012 7:30 AM
Central
banks continued to purchase gold in the third quarter at near-record pace,
driven by emerging market central banks looking to diversify away from
traditional reserve currencies amid heightened economic insecurity and
continuous unconventional monetary easing, according to World Gold Council
data released Thursday.
Gold reserves at central banks increased by 97.6 metric tons during the
July-September period, albeit at a slower pace compared with a record
year-ago quarter. The official sector accounted for 9 percent of overall gold
demand during the third quarter.
“I wouldn’t emphasize the fall of 31 percent [from a year
ago],” said Marcus Grubb, managing director for investment at the WGC.
“Anything close to 100 tons is very high by the last 15 years.”
World’s central banks collectively bought 374 tons of gold in the first
nine months of this year. That’s higher than last year’s 343 tons
for the same period.
“We still think we might beat last year’s total for central banks
of 456 tons, though it’s going to depend on Q4,” Grubb said.
“[This year will likely come in at] somewhere between 455 tons and 500
tons, which will be another record since the early 1960s.”
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.
Official sector demand is likely to act as a fairly solid pillar of demand
going forward.
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