Central Banks Expand Gold Reserves With $6 Billion in Purchases

Mexico, Russia and Thailand added gold now valued at about $6 billion to their reserves in February and March as prices advanced to a record, the dollar weakened and Treasuries lost investors money. Mexico bought 93.3 metric tons since January, increasing holdings from about 6.9 tons, according to data from theInternational Monetary Fund, and the nation’s central bank later said it purchased 100 tons in recent months. Russia increased reserves 18.8 tons to 811.1 tons in March and Thailand expanded assets 9.3 tons to 108.9 tons in the same month, the data show.

“Central banks have good reason to buy gold,” said Peter Morici, a professor of business at the University of Maryland in College Park and a former economic adviser to the U.S. government. “The dollar is no longer a safe asset for backing currencies. Treasuries are not a sound investment” and budget and debt issues mean central banks should buy gold, he said. “Mexico’s gold accumulation confirms the demand of emerging-market central banks to diversify,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon,Switzerland. “They will be the big buyers for years to come.”