Mongolia Increases Gold Reserves to Highest Since August 2008

Mongolia raised its gold reserves for a third month to the highest in more than four years in February as the metal capped its longest monthly losing streak since 1997.

The country’s holdings expanded 1.5 metric tons to 5.8 tons, the most since August 2008, according to the International Monetary Fund’s website. Kazakhstan’s holdings increased 4.9 tons, Azerbaijan’s climbed 1 ton and Ukraine’s rose 0.6 ton, the data show. Canada’s reserves dropped 0.1 ton, the Czech Republic cut them by 0.2 ton and Mexico’s holdings fell 0.1 ton.

Nations added 534.6 tons to reserves last year, the most since 1964, even as prices averaged a record $1,669 an ounce, the London-based World Gold Council said last month. Bullion slid for five consecutive months through February and investors sold metal from exchange-traded products this year amid signs the U.S. economy is improving and as Federal Reserve policy makers debated the pace of stimulus. Gold is trading 17 percent below its September 2011 record of $1,921.15.

“Given the depreciation rates of the major currencies in the world and the debt crisis, especially in the euro zone, there’s definitely a lot of room to buy gold,” Daniel Briesemann, a commodities analyst at Commerzbank AG in Frankfurt, said today by phone. “The percentage of gold in currency reserves is still very low in emerging markets, so there’s a lot of catch-up potential to the industrialized countries.”

Russia’s Reserves

Russia raised its gold reserves by 7 tons to 976.9 tons, according to the IMF data. The country’s central bank said earlier this month that it raised holdings by about that much. Turkey’s reserves climbed 5.7 tons to 375.7 tons, the data show. Its holdings have increased due to it accepting gold in its reserve requirements from commercial banks.

Gold for immediate delivery fell 0.5 percent $1,596.85 by 9:42 a.m. in London, extending its decline this year to 4.7 percent. The metal rallied for a 12th straight year in 2012 as nations from the U.S. to China pledged more stimulus to bolster economies and as investors sought an alternative to currencies.

Gold accounts for about 4.7 percent of Mongolia’s total reserves and about 23 percent of Kazakhstan’s, according to the World Gold Council. That compares with more than 70 percent for the U.S. and Germany, the biggest bullion holders, the data show.

To contact the reporter 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

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