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CORRECTED-(OFFICIAL)-UPDATE 2-Russia buys more gold reserves, Netherlands steady
January 27, 2015 / 3:10 AM / in 3 years

CORRECTED-(OFFICIAL)-UPDATE 2-Russia buys more gold reserves, Netherlands steady

(Corrects headline as well as first three paragraphs to say that the Netherlands did not raise its gold holdings, as had been incorrectly stated in an earlier IMF news release)

* Russia added 20.73 tonnes in December-IMF

* Gold price rose in December for first time in five months

By A. Ananthalakshmi

SINGAPORE, Jan 27 (Reuters) - Russia extended its buying spree of gold to a ninth straight month, and the price of gold rose for the first time in five months, data from the International Monetary Fund showed on Tuesday.

The global financial institution later on Tuesday confirmed the Netherlands did not increase its bullion holdings in December, contrary to the IMF’s earlier report that the bank had raised gold holdings for the first time in 16 years.

The Dutch central bank, the world’s ninth-biggest official sector gold holder, has kept its holdings unchanged since late 2008. The bank earlier on Tuesday denied that it bought more gold last year.

Central bank buying and selling can have a significant influence on gold prices. Central banks became net buyers in 2010 after two decades as net sellers, driven by an increased interest in gold in the wake of the 2008 global economic crisis.

Gold prices rose nearly 1 percent in December, the first monthly rise in five, possibly on support from central bank purchases.

“It has been the emerging market central banks that have been doing the buying over the past few years, so it is encouraging for gold markets to see the Dutch additions,” said Victor Thianpiriya, an analyst with ANZ in Singapore, speaking before the IMF’s data correction.

The Dutch central bank in November moved to repatriate more than 120 tonnes of gold from vaults in the United States.

Net purchases by the euro area totaled 9.55 tonnes in December, at a time of heightened jitters over the economy and speculation over stimulus measures by the European Central Bank, which just last week announced a bond-buying programme.

Meanwhile, Russia added 20.73 tonnes to the world’s fifth-biggest gold holdings, bringing its total to 1,208.23 tonnes.

Russia’s gold-buying spree comes amidst a bearish outlook for its economy, which is expected to slide into recession this year on low oil prices and the fallout from sanctions over Ukraine.

Ratings agency S&P cut Russia’s sovereign credit rating to junk status on Monday, bringing it below investment grade for the first time in a decade.

PAUSE IN UKRAINE SALES

Ukraine, which has seen renewed conflict with pro-Moscow separatists and is also struggling with economic growth, seems to have taken a pause in selling its gold holdings.

It sold about 16 tonnes of gold in October and November, but Tuesday’s data showed that its bullion reserves were steady at 23.64 tonnes in December.

Turkey, however, lowered gold holdings by 3.86 tonnes to 529.12 tonnes. Turkey counts gold held on deposit with commercial banks as part of the central bank’s bullion holdings.

Other buyers included Kazakhstan, Belarus and Malaysia. (Additional reporting by Jan Harvey in London; Editing by Ed Davies)

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