Kazakhstan raised its stash to 7.13 million ounces in December from 7.03 million ounces in November and 6.17 million ounces a year earlier, data on the IMF’s website showed. The country increased holdings for the 39th month. While Turkey’s reserves rose to 16.57 million ounces in December from 16.39 million ounces a month earlier, holdings were lower than 17.01 million ounces a year ago, the website showed. Canada cut its holdings to 54,790 ounces last month after holding 96,000 ounces since December 2013.

Central banks including China and Russia’s have been beefing up holdings of gold over 2015 and net purchases have become a “familiar theme” in the global market, according to the World Gold Council. While gold dropped 10 percent last year as the Federal Reserve started to raise interest rates, prices have rebounded in 2016 on volatility in global equity markets and concerns that China may weaken its currency further.

Commodity Rout

The data shows further accumulation by central banks, especially by commodity-centric emerging countries that have faced pressures to devalue as a result of lower raw material prices, according to Vyanne Lai, an economist at National Australia Bank Ltd.

“The recent global equity rout triggered by Chinese economic slowdown fears has intensified these pressures, which will see these central banks increase their exposures to gold as a way to diversify some of the currency risks,” Lai said ahead of the data.

In the third quarter, central banks and other institutions boosted bullion purchases to the second highest on record, according to the WGC’s quarterly report. Figures from the People’s Bank of China show the country has boosted holdings 6.3 percent since announcing in July a 57 percent jump in the previous six years.

Bullion has rallied 5.5 percent to $1,119.11 an ounce this year, according to Bloomberg generic pricing. Prices sank to $1,046.44 an ounce on Dec. 3, the lowest since February 2010.

Source: Bloomberg