Central Banks Join Gold Rush

Source:

"Foreign governments have been driven by continued fears about the pace of economic recovery."

Foreign governments have been getting in on the recent gold rush, driven by continued fears about Europe's debt crisis and the pace of the global economic recovery.

Last year, foreign central banks were net buyers of gold for the first time since 1997. India, China and Russia have been the biggest buyers. And more recently, the Philippines and Kazakhstan jumped into the fray with big purchases of the precious metal during the first quarter, according to data released by the World Gold Council Thursday.

Russia and Kazakhstan: As far as public records show, Russia appears to be the largest buyer of gold among central banks so far this year. In the first quarter of 2010, Russia's central bank increased its gold reserves by 26.6 metric tons, or about $1.2 billion at today's price, according to World Gold Council data. That's in addition to the 117.63 tons that Russia added in 2009.

Philippines: After Russia, the Philippines falls a distant second as a buyer, after purchasing 9.6 tons, or about $424 million, of gold earlier this year.

India: While India has yet to publicly announce any major gold buys this year, the country bought a massive 200 tons, or what amounts to about $8.8 billion at current prices, from the International Monetary Fund in November.

China: China is considered a stealth buyer of gold, said Boris Schlossberg, director of currency research at Global Forex Trading. As the world's largest producer of the metal, China often buys gold from its own mines and doesn't report those sales publicly. But in April 2009, China did admit to having added 454 tons, or a 76% increase, to its reserves since 2003.

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