Gold holdings growth rate reaches 45-year peak

16:53, March 22, 2010      

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Last year, central banks around the world added the most gold to their reserves since 1964, according to data compiled by the World Gold Council. In 2009, gold prices maintained the longest growth period in at least 90 years.

Last year combined gold holdings of all central banks rose by 425 metric tons to roughly 30,117 tons, an increase worth $13.3 billion at last year's average price. India, Russia and China all increased gold reserves last year.

Currently, central banks, holding about 18 percent of all gold ever mined, are expanding their holdings for the first time in a generation. Investors in exchange-traded funds are amassing bullion as an alternative to currencies.

Holdings in the SPDR Gold Trust, the biggest ETF backed by the metal, are at roughly 1,116 tons, more than the holdings of Switzerland.

Nick Moore, an analyst at Royal Bank of Scotland Group Plc., said "There has clearly been a renaissance of gold in central bankers' minds. It has not just been central banks taking on gold, but a general shift for physical gold in the investment sector." He also predicts that the rising gold price may prevent many countries from further increasing their gold reserves.

CPM Group forecasted last month that official reserves of central banks and governments may expand by another 187 to 218 tons this year. Gold climbed 24 percent last year, reaching a record $1,227 an ounce in December.

By People's Daily Online
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