Central banks rush back to gold as demand hits 15 month high

DEMAND for gold spiked to a 15 month high in the third quarter of the year, boosted by central banks rushing to stock up on the precious metal.

Central bank net purchases in the three months to September amounted to a staggering 148.4 tonnes, although the identity of the buyers was not revealed by the World Gold Council.

Total demand for gold jumped to 1,053.9 tonnes, a six per cent increase compared to the same period last year.

Global economic woes also prompted a rush to the so-called safe haven commodity. “Increasing levels of inflation, the US credit rating downgrade, a worsening Eurozone sovereign debt crisis and the lacklustre performance of many assets drove investors to increase holdings in gold in order to protect their wealth,” explained Marcus Grubb, the group’s managing director investment.

India’s imports fell 20 per cent in the July to September period to just 200 tonnes but should pick up to beat last year’s 281 tonnes in the fourth quarter, the Council said.

With India’s imports totalling 753 tonnes in the first nine months of this year, that would put the full year figure close to 1,034 tonnes – well above last year’s record of 960 tonnes and ahead of expectations.