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Old 03-28-2013, 10:30 AM   #1
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Central Banks Bought More Than $4.5 Billion In Gold In 2013 In three months they bought 81 tonnes

The headline downplays the money amount. Read the article and do the second grade math that the author couldn't.

Gold has been on a definite downtrend since last October, with bullion falling a dramatic 5.1% in February alone. As prices have dropped and investors lost faith, central banks have been on the opposite side of the trade, gobbling up bullion at a rate of 27-metric tons a month, according to UBS’ gold expert Edel Tully. Russia and South Korea are among the biggest buyers, while several smaller, first-time acquirers have emerged, suggesting global central banks aren’t snubbing the yellow metal in the same way the general market seems to have done, which, in the face of it, is definitely bullish for gold.

Central banks became net buyers of gold in 2011 after 20 years of consistent selling, according to the World Gold Council. And while the yellow metal has fallen consistently every month since October (with the exception of March, where gold is up 1.6%), the trend seems set to continue.

Data compiled by UBS shows central banks bought about 54 metric tons of gold in the first two months of the year; that’s more than 1.9 million ounces, or more than $3 billion at Wednesday’s prices (bullion stood at $1,606.30 an ounce by 3:36 PM in New York). South Korea, for example, announced it a purchase for 20 metric tons in February, while Russia is 19.2 metric tons deep in 2013. Other buyers include Kazakhstan (6.6 metric tons), Indonesia (1.9 metric tons), Bosnia and Herzegovina (1 metric ton), and Azerbaijan, which bought 2 metric tons after having zero gold reserves in over a decade.
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Old 03-28-2013, 10:44 AM   #2
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That's a lot of gold.

Annual global gold production is roughly 1,400 tons. China and Russia, which aren't exporting anymore, account for roughly 300 of those tons. Of the 1,100 tons produced annually, anywhere from 50-60% is used by jewelry and industry. Conservatively, that leaves ~600 tons for investment (both private and central bank).

54 metric tons / 2 months X 12 months = 324 tons

Central banks are on pace to acquire at least 54% of annual production available for investment.

Figures pulled from sources listed here

US Mint alone used ~26 tons to make Gold Eagle coins in 2012 for private investors.
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