Central banks are expected to be net buyers of gold in 2011 for the first time in nearly two decades, the World Gold Council (WGC) said yesterday.
“For next year, we will probably see a scenario where central banks are net buyers [of gold] for the first time in something like 17 years,” Marcus Grubb, the WGC’s managing director for investment, told delegates at the World Gold Investment Congress in London. He said central banks had been net buyers of 7.7 tonnes of gold in the second quarter of 2010. Before 2009, they were net sellers of an average of 400 tonnes per year.
Gold prices hit a record high above $1,360 an ounce yesterday, driven by weakness in the dollar, which stemmed from growing expectations for the Federal Reserve to keep US interest rates low to support economic growth. The prices have risen by more than 20 per cent so far this year, supported by central bank moves to become aggregate buyers of gold.