In the last trimester the central banks have bought one record amount of gold for diversify your foreign currency reserves coming from mystery shoppersaccording to Eddie Spence at Yahoo Finance.
Central banks picked up almost 400 tons in the third quartermore than four times the amount of the previous year, according to the World Gold Council (WGC). That brings the year-to-date total to highest since 1967when the dollar was still backed by the metal.
Bullion prices have come under pressure this year from aggressive US interest rate hikes as the Federal Reserve addresses rising inflation, which has led to investors of exchange-traded funds to sell the asset without yield. But support has come from other areas, such as retail buyers in Asia and central banks.
Central banks, including Turkey and Qatarwere among the recent buyers, as well as unreported purchases from institutionswhich the WGC said, while not uncommon, amounted to a “substantial” estimate. Not all countries report their gold purchases regularly, including major ones such as China and Russia.
“Not all official institutions publicly report their gold holdings, or they may do so with a delay,” the WGC noted in a quarterly report published on Tuesday. “We cannot rule out further unreported purchases.”
The council hopes that the overall investment in gold declines this yearas lower ETFs and OTC demand offset strong retail buying.
“Despite strong demand, bullion prices are mainly dependent on external factors such as the macroeconomic sentiment and the direction of the dollarsaid Gnanasekar Thiagarajan, Director of Commtrendz Risk Management Services. “The precious metal has been under pressure before the Wednesday Federal Reserve statementhe added”.