Gold offers refuge to emerging-market central banks - Wealth Managers

Turkey, Kazakhstan, Azerbaijan, Ukraine, and Belarus among buyers in December

Large-scale gold purchases by central banks has been a key driver of bullion prices in the past few years by taking significant quantities off the market. Though the pace of buying has perhaps slackened in recent months, the multiple currency crises erupting across the globe in locales such as Turkey and Argentina could make gold an even more sought-after safe-haven asset.

The central-bank purchases continued in December, according to new data from the International Monetary Fund. "Turkey's central bank reported an increase of more than 430,000 ounces to the IMF, taking its official reserves to 16.7 million ounces," The Wall Street Journal reported.

Kazakhstan raised its gold reserves by 77,000 troy ounces last month, to 4.6 million ounces, while Azerbaijan added 32,000 ounces to hit 644,000 ounces. Belarus bought 28,000 ounces, and Ukraine acquired 20,000 ounces.

"The IMF figures suggest emerging markets remain committed to bolstering their gold reserves," The WSJ noted. "Some analysts say a central-bank decision to start accepting gold as collateral from commercial banks in late 2011 has been the main cause of a sustained rise in the country's precious-metal holdings."

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