China, Russia lead central banks gold buying spree

China, Russia lead central banks gold buying spree

People’s Bank of China headquarters in Beijing. (Image Wikimedia Commons)

China and Russia added more gold to its reserves in November, leading the latest global central banks buying spree that saw them adding 55 tonnes of the yellow metal to their coffers, up almost 90% from the prior month.

According to the latest World Gold Council’s gold reserve data, released Wednesday, China and Russia were once again the biggest buyers, with 21 tonnes and 22 tonnes added to their respective reserves.

The People’s Bank of China (PBoC) released data last week that showed 19 tonnes were added in December as well. But based on official figures, released last June for the first time since April 2009 and updated monthly ever since, the amount of gold held by the PBOC still only accounts for around 1.7% of its total reserves.

The increased purchases by the world’s sixth largest official sector gold holder could lend support to international prices of the precious metal, say analysts.

China, Russia lead central banks gold buying spree

Despite a jump in prices at the start of the year, gold is still trading close to historic lows. February gold was last up $3.00 at $1,088.50 an ounce, well down from last week’s two-month high of $1,113.10 an ounce, basis February Comex futures.

Bullion prices dropped 10% last year, a third straight annual loss, on fears that higher U.S. rates would dent demand for the non-interest-paying metal. Several analysts have predicted further price declines this year.