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FOCUS: WGC: Central-Bank Net Gold Purchases In 2012 Most Since 1964

By Allen Sykora of Kitco News
Thursday February 14, 2013 1:01 AM

(Kitco News) - Central-bank demand for gold in 2012 was the most since 1964, said the World Gold Council Thursday in its quarterly report on demand trends.

Net purchases by central banks rose to 534.6 metric tons in 2012 from 456.8 in 2011. This accounted for 12% of total global gold demand last year, up from 10% in 2011, the report said.

Central banks were previously net sellers for many years before shifting to net buyers in the second quarter of 2009. Since, central banks have added nearly 1,100 tons of gold to reserves, nearly reversing the 1,143 tons of net sales from the previous three years, the WGC said.

“The list of countries actively adding to their official gold holdings remains heavily concentrated in developing markets, which partly reflects the scale of growth in the reserves of these markets over recent years,” said the WGC report. “As the official reserves of these countries swell, with their heavy emphasis on U.S. dollar- and euro-denominated assets, the need for diversification also increases. With a focus on high quality, liquid assets as desirable alternatives, gold is a natural destination for a proportion of
these increased reserves.”

Russia added 75 tons to its reserve holdings through the purchase of domestically produced gold, said the WGC. The nation now holds more gold reserves than all but six other countries, with its holdings standing at 957.8 as of year-end, the WGC said.

Other notable buyers mentioned on the report included Brazil, Paraguay, Mexico, Iraq, South Korea and the Philippines.

Central-bank buying for just the fourth quarter was 145 tons. The WGC described this as the second-highest quarterly tally since the sector became a net source of demand in the second quarter of 2009.

By Allen Sykora of Kitco News; asykora@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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