Scared Cen­tral Banks Find Safe Haven in Gold, Buy 483T in 2015

Stud­ies say cen­tral banks bought gold worth $19-bil­lion last year. The move to gold was driven, along with global un­cer­tainty, by a de­sire to di­ver­sify as­sets

The Economic Times - - Commodities Plus -

Will Martin

New York: Last year was a hugely tur­bu­lent time for the world. ISIS con­tin­ued to cause dev­as­ta­tion in the Mid­dle East, ten­sions be­tween Rus­sia and Ukraine in the Crimea re­mained, ter­ror­ist at­tacks shook Europe, and Greece’s debt cri­sis — which threat­ened to break up the eu­ro­zone — reached boil­ing point.

All that geopo­lit­i­cal and eco­nomic tur­moil re­ally spooked the world’s cen­tral banks, and pushed them into safe haven as­sets, no­tably gold.

Ac­cord­ing to re­search from Thom­son Reuters and gold con­sul­tancy GFMS, first re­ported by the Fi­nan­cial Times, net pur­chases of gold by cen­tral banks topped 483 tonnes last year. That’s the sec­ond-highest amount pur­chased in a sin­gle year since the end of the gold stan­dard in the mid-20th cen­tury. That amount of gold is worth roughly $19 bil­lion at today’s prices. The move to gold, was driven, along with global un­cer­tainty, by a de­sire from cen­tral banks to di­ver­sify the kind of as­sets held in re­serves.

On a coun­try-by-coun­try ba­sis, Rus­sia bought the most gold, 206 tonnes to be pre­cise, while China came a dis­tant sec­ond, buy­ing up 104 tonnes in the sec­ond half of the year, up­ping its to­tal hold­ing to 1,742 tonnes. “Rus­sia and China are real stand­outs,” Ross Stra­chan, pre­cious metal de­mand man­ager at GFMS said. Rus­sia’s huge pur­chase of gold was largely down to Moscow seek­ing to rely less heav­ily on the US dol­lar as a re­serve as­set, thanks to ten­sions with West, ac­cord­ing to Reuters GFMS. — Busi­ness In­sider

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.