Russia and Kazakhstan expanded their gold reserves for an eighth straight month in May, buying the metal to diversify assets even as investors lost faith in bullion amid the outlook for reduced stimulus.
Russian holdings, the seventh-largest by country, climbed 6.2 metric tons to 996.2 tons, taking gains this year to 4 percent after expanding by 8.5 percent in 2012, International Monetary Fund data show. Kazakhstan’s hoard grew 4 tons to 129.5 tons, taking the increase to 12 percent this year after a 41 percent expansion in 2012, data on the website showed.
Gold fell 6 percent in May, extending a 7.6 percent drop in April when the metal entered a bear market. Prices are down 24 percent this year and plunged last week to the lowest level since September 2010 after Federal Reserve Chairman Ben S. Bernanke said the central bank may slow its bond-buying program if the U.S. economy continues to improve.
“It’s really encouraging to see central banks continue to view current price levels as attractive,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. (ANZ), said by phone in Singapore. “That’s going to be one of the underpinning things for gold in the long term.”
Gold for immediate delivery traded at $1,279.60 an ounce at 3:45 p.m. in Singapore. Bullion is heading for its biggest annual drop since 1981 after advancing for 12 years. Continued central bank buying will not be sufficient to offset the decline in prices, Goldman Sachs Group Inc. said in a June 23 report.
Turkey’s holdings rose 18.2 tons to 445.3 tons in May, increasing for an 11th month as it accepted gold in its reserve requirements from commercial banks. Azerbaijan and Kyrgyz Republic were among nations that bought bullion in May, while Brunei and Nepal added gold in April, according to the IMF data, which update as countries report.
Mexico cut its gold reserves for a 13th month while Czech Republic also reduced holdings, the data showed.
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