What’s significant about gold's resurgence is that it’s not only smaller investors and larger funds buying gold - central bank purchases have been quietly and consistently on the rise. My attention was drawn to a report published by the Official Monetary and Financial Institutions Forum (OMFIM), which concluded that “gold is re-assuming a more central monetary role as a favoured investment for central banks as a result of low and negative interest rates, increased perception of country risk, and enhanced geopolitical uncertainty.” Essentially the same motivating fsctors that are driving mums-and-dads to gold. This positive sentiment is also reflected in the World Gold Council’s latest Gold Demand Trends report, which showed that central banks added 566 tonnes of gold (US$21 billion worth) during 2015 – the sixth consecutive year of net purchases. During Q1 2016, central banks bought 109 tonnes of gold and the WGC expects total net purchases for 2016 to range between 400 - 600 tonnes. As a result I believe gold could trade as high as $1,400 this year and $1,500 during 2016.
Yes, I remember central banks across the world auctioning part of their gold in 2007-08 period. But why is the growth rate dipping for the periods 2009-10 and 2012-14, while the holdings were still going up?