Latest
figures from the IMF show that Central Banks have continued to increase
their gold holdings significantly in April, after a big increase the
previous month.
The latest official Central Bank gold holding figures from the IMF
confirm that Central Banks around the world are continuing to buy gold -
some in pretty large quantities which should be yet another stabilising
factor for the gold price - and if the trend continues suggests that
the CBs will buy even more this year than last - and that's only the
ones which let the world know exactly what their gold reserves are!
The latest figures not only show some substantial gold buying in
April, but also a big lift in gold purchases by The Philippines which
actually date back to March, but were slow in being notified to the
IMF. The Phillipines' March gold purchases amounted to no less than
1.033 million ounces - 32 tonnes - of the yellow metal - the biggest
volume since Mexico bought around 78 tonnes a little over a year ago -
and increased tet country's gold reserves by almost 20%.
The Phillippines was not the only laggard in reporting increased gold
reserves though. Tiny Sri Lanka raised its reserves by an even greater
39%, but dating back to January, with a rise of 2.177 tonnes to 7.807
tonnes - obviously far less significant in the global picture but yet
another indication of the perceived significance of gold in particular
in the Asian economies.
The most significant reported gold purchases in April itself included
29.7 tonnes by Turkey (a 14% increase in its reserves, but this is
thought to have largely been due to its policy of acceptance of gold as
collateral from commercial banks), 2.92 tonnes by Mexico, 2.02 tonnes
by Kazakhstan, and 1.4 tonnes by the Ukraine.
The continued buying by Central Banks does continue to indicate an
underlying unease about the sovereign debt situation and its impact on
the value of some key reserve currencies- not least the dollar and the
euro.
In an email to Mineweb respected New York gold analyst, Jeff
Nichols, commented "The lastest IMF data on central bank gold reserves
was just released earlier today -- showing gold purchases by Mexico,
Kazakhstan, Ukraine, Russia, and the Philippines. Undoubtedly, China and
perhaps a few other countries bought gold but did not report their
purchases to the IMF." This reiterates the widespread belief that some
countries - of which China is thought to be the major entity - for
political reasons do not report their total holdings to the IMF, but
hold new gold purchases in accounts that are not reported until it is
considered politically expedient to do so. Last time China reported an
increase in reserves was in 2009.
Since then there has been much speculation that China could be
building up its reserves at a rate of four or five hundred tonnes a year
or more given the level of domestic gold production and the big surge
in imports seen. Although China is the world's sixth largest holder of
gold, the metal only represents a tiny 1.8% of its reserves and there
have been a number of presumably government approved (is there anything
else in China?) statements by officials that do suggest the nation is
carefully buying on dips in the gold price so as not to create
disruption in a relatively orderly global gold market.
Overall reported Central Bank gold purchases last year amounted to
over 450 tonnes - the highest for nearly 50 years and The World Gold
Council and GFMS have suggested that this year will see another 400
tonnes or more flowing into Central Bank coffers - and the purchases to
date suggest that this target may well be achieved. Gold may have
fallen out of Central Bank favour for a few decades but the realisation
now is increasingly that it should be a significant part of a country's
foreign reserve base as fiat currencies the world over lose their
intrinsic value.