Mexico Halts 3-Month Gold Reserve Expansion, IMF Data Show
Mexico reduced its gold reserves by 0.18 metric ton in May after boosting holdings the previous three months, according to International Monetary Fund data.
Mexico’s reserves declined to 105.95 tons last month, data on the IMF’s website showed. It had expanded holdings by almost 100 tons in the three months through April, with the increase valued at about $4.8 billion at today’s price. Russia’s central bank boosted its gold holdings to about 26.7 million ounces (830.5 tons) last month, from 26.5 million ounces in April, Bank Rossii said on June 20.
“It was surprising to read that Mexico sold some gold, they seem to actively manage their reserves,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “We think central banks will continue to buy gold and diversify their reserves and this should be true especially for the emerging market central banks. Generally, gold buying by central banks should be supportive of the gold price.”
Central banks are expanding their gold reserves for the first time in a generation as purchases by billionaire investors including John Paulson contributed to bullion extending its longest winning streak since at least 1920. The metal is trading 4.3 percent below a record $1,577.57 an ounce set May 2.
Bullion traded at $1,510.12 by 11:51 a.m. in London and is up 6.3 percent this year. It’s heading for an 11th straight quarterly gain. Global holdings of gold by governments and official institutions such as the IMF stood at 30,684.2 tons by this month, according to the World Gold Council.
Bank Purchases Rise
Central banks will be net buyers of gold this year and probably next year, Marcus Grubb, managing director of investment at the producer-funded council, said on June 16. They bought 129 tons this year through April, exceeding last year’s total of 90 tons, Grubb said then.
Since the end of 2009, countries including India, Sri Lanka, Mauritius and Bangladesh have bought gold. Bullion accounted for 4 percent of Mexico’s total reserves, and 7.8 percent of Russia’s, according to the latest World Gold Council holdings report. The metal accounts for more than 70 percent of reserves of the U.S. and Germany, the biggest holders, the council’s data show.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
Rate this Page