CHART OF THE DAY: The World’s Central Banks Are Bulking Up In Gold
Aug. 16, 2012
The World Gold Council released its latest quarterly Gold Demand Trends report today.
Demand for gold as an investment got crushed in the second quarter this year, declining 25.9 percent from last quarter – the worst quarter-over-quarter drop seen since the third quarter of 2010.
The drop in investment demand was led by weakened demand in India and China for physical gold like bars and coins. The WGC report says that in both countries, “interest in gold bars and coins remains fundamentally strong,” but the slump in demand in the second quarter came from profit-taking in India and directionless price action in China.
On the other hand, official sector purchases soared in the second quarter, with central banks around the world scooping up 157.5 tons of gold. That number marks a 62.9 percent increase from the first quarter and a whopping 137.9 percent increase year-over-year.
It is also the most gold central banks have bought up in a single quarter since the WGC started tracking the numbers in the Q2 2009.
Buyers include South Korea, Turkey, Russia, and Ukraine.