Central banks, particularly in Asian countries, are continuing to dump US treasuries and diversify into more gold accumulation at record numbers. Even Europe, which is trying to sell the world on toxic and sovereign debt, is purchasing physical gold behind the scenes with the knowledge that the game is almost over for their fiat economies.
Global gold demand was worth a mere US$205.5 billion which is not a substantial sum considering the size of global capital markets today. It was the first time that global demand has exceeded US$200 billion and the highest tonnage level since 1997.
Central banks were net buyers of gold and their demand surged nearly 6 fold (570%) to 439.7 tonnes in 2011 - compared with 77 tonnes in 2010.
Demand for gold bars and coins accelerated, reflecting a blend of positive influences including concern over the financial health and future viability of the euro area; high inflation in some countries; positive price expectations; and the relatively poor performance of a range of alternative investments. – Goldcore via Zerohedge
Chart courtesy of Bloomberg and Goldcore