Sunday, January 27, 2013

Russia, Kazakhstan Expand Gold Reserves as Central Banks Buy



Russia and Kazakhstan expanded their gold holdings in December, seeking to diversify their reserves as the metal capped a 12th annual advance and investors raised holdings to an all-time high.

Russian holdings climbed 2.1 percent to 957.8 metric tons in December, taking the increase over 2012 to 8.5 percent, according to data on the International Monetary Fund’s website. Kazakhstan’s hoard expanded 1.7 percent to 115.3 tons last month, and surged 41 percent over the year, the data showed.

Bullion has rallied as investors sought a haven from weaker currencies and potential inflation, with governments from the U.S. to Europe and Japan ramping up stimulus to promote faster growth. Gold holdings in exchange-traded products reached a record last month. Prices will rally this year and into 2014 on central banks’ stimulus measures, according to Morgan Stanley.

Central banks need to “diversify into gold as the euro zone is not yet out of the woods,” said Lynette Tan, a senior investment analyst at Phillip Futures Pte. in Singapore. “This will provide long-term support for gold prices.”

Gold for immediate delivery climbed as much as 0.2 percent to $1,661.45 an ounce and was at $1,660.40 at 1:11 p.m. in Singapore. The price increased 7.1 percent last year, the smallest annual gain since 2008. The precious metal reached a record $1,921.15 an ounce in September 2011 as Europe’s debt crisis stoked speculation that the euro zone may fragment.

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