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Gold purchases in the first quarter by central banks, led by Russia and China, were the highest in six years as countries diversified their badets away from the US dollar.
World gold reserves rose 145.5 tonnes in the first quarter, an increase of 68% over the previous year, the World Gold Council announced Thursday. Russia remains the main buyer as the country reduces its holdings of the US Treasury in a de-dollarization campaign.
"We have seen strong demand from central banks," said Alistair Hewitt, head of market information at the World Gold Council. "We are expecting another good year for central bank purchases, although I will be pleasantly surprised if they were to match the 2018 level."
On the way to the gold
The central banks of the world have bought more gold than any first quarter for six years
Source: World Gold Council
In addition to the usual buyers such as Kazakhstan and Turkey, the first quarter also saw Ecuador increase its reserves for the first time since 2014, as well as major purchases from Qatar and Colombia, said the council. Buyers are dominated by countries seeking to reduce their dependence on the dollar and are generally countries with lower gold reserves than Western European countries.
Central bank purchases have been a key support for gold, offsetting lower demand from investors in bars and parts as well as industrial users of the metal. Gold has lost 1% since the beginning of the year and was trading at around $ 1,270 an ounce in London on Thursday.
Entries into the gold – backed exchange – traded funds in January were eliminated during the remainder of the year, with ETF levels now at their lowest level in four months.
On the supply side, the World Gold Council has revised its estimates of the contribution of artisbad miners as a result of a re-evaluation of its leading data provider, Metals Focus Ltd. The sector represents 15 to 20% of world production. production of gold mines.
In countries such as Zimbabwe, small-scale miners account for more than half of gold production and are a vital part of the economy. According to the new London Bullion Market Association guidelines, these miners may have more difficulty selling their gold legitimately, as some of their results could be categorized as "blood gold" – products outside of any safety rules or and likely to contribute to crimes such as child labor and slavery.
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