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
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