Central banks bought nearly 26 tonnes of gold in October, following purchases from Russia, Mexico, Belarus and Colombia, among others, bringing total official purchases to 230.25 tonnes this year, according to the International Monetary Fund. Russia made its largest monthly purchase so far this year, by adding 19.5 tonnes to bring its reserves to 871.05 tonnes.
The increase in October was almost as large as its net purchases for the preceding four months, according to data on the IMF website. Germany made its first sale since July 2010, bringing its gold reserves down by 4.35 tonnes to 3,396.3 tonnes, which UBS said tied in with the European Central Bank reporting a sale on October 7 by one euro zone central bank for the purpose of minting coins. Latin American and central European and Asian central banks were among the buyers in October. Mexico bought nearly 1 tonne, marking its first purchase since April and bringing its reserves to 106.28 tonnes, their highest since October 1976.
Central banks became net buyers of gold in 2010 for the first time in two decades and have remained net purchasers this year, even though the price of gold has risen by more than 20 percent in the year to date to around $1,690 an ounce. Most official purchasers own large foreign exchange reserves and have bought gold as a means of investing a smaller portion of those currency holdings in the US dollar.