Turkey raised its gold reserves by the most in five months in August and topped the list of countries that bought more bullion, according to the International Monetary Fund, showing that gold’s appeal remains intact despite falling prices.
Russia, which has the world’s seventh largest reserves of gold, increased its holdings last month by the biggest amount since December, according to the IMF data on yesterday.
Eight central banks increased reserves in August, down from 15 in July, while five cut their holdings.
Gold holdings by central banks are keenly watched since the group became net buyers in 2010 after two decades as net sellers. The 2008 global economic crisis triggered resurgent official-sector interest in gold.
“This is consistent with our view that central banks continue to view gold as good value on a long-term basis,” said Victor Thianpiriya, an analyst with Australia and New Zealand Banking Group.
“(Central bank buying) should continue to be a supporting factor going forward.”
The latest purchases came after spot gold fell below $1,300 an ounce in early August on fears the U.S. Federal Reserve would cut its massive bond purchases that had burnished bullion’s draw as an inflation hedge.
Turkey added 23.344 tons to lift its gold holdings to 487.351 tons, while Russia increased reserves by 12.722 tons to 1,015.521 tons. Turkey has bought gold in 13 of the past 14 months and Russia has added to its reserves for 11 consecutive months.