Russia and Colombia Buy Gold, Mexico Sells - 31 August 2011

THE CENTRAL BANKS of Russia and Colombia opted to Buy Gold in July – while Mexico opted to sell some of its Gold Bullion reserves – according to data published Wednesday by the International Monetary Fund.

Russia bought 4.42 tonnes of gold last month – taking its official holdings to 841.131 tonnes – while Colombia opted to Buy Gold for the first time since March 1998, buying 2.3 tonnes to take its official reserves to 9.14 tonnes.

"A powerful source of demand for gold [is] coming through from the central bank community," says Michael Lewis, global head of commodities research at Deutsche Bank.

"This is still a very weak Dollar environment where people do want to diversify."

Mexico's central bank – which bought 99.2 tonnes of gold between February and April – chose to sell 0.19 tonnes last month. Mexico's official reserves, according to IMF figures, now stand at 105.69 tonnes.

Kazakhstan and Tajikistan also sold gold in July. Kazakhstan sold 3.11 tonnes – taking official reserves to 67.323 tonnes – while Tajikistan reduced holdings by 1.19 tonnes to 1.841 tonnes.

Colombia's move makes it the fifteenth country to Buy Gold in 2011, according to World Gold Council data. Other countries to Buy Gold in substantial quantities this year include Thailand (28 tonnes in the six months to June) and South Korea (25 tonnes bought in June), according to WGC figures.

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