Central banks last year added the most gold to reserves in almost a half century and will likely remain an important force in the gold market in 2013, the World Gold Council said Thursday. “We think this trend is going to continue,� Marcus Grubb, managing director for investment at the WGC, said by phone from London. “Although you are seeing some improving sentiment around equity markets and some rotation back to risky assets on the hope of better growth this year, especially in the U.S., central banks are still buying gold because they are concerned about quantitative easing and low interest rate policies, which are what are fueling the economic growth.� Central banks boosted purchases by 29 percent to 145 metric tons in the fourth quarter of 2012, an eighth successive quarter of net buying, the London-based industry group said. In the full year, central bank bought 534.6 tons of the precious metal – the most since 1964. Net purchases by central banks accounted for 12 percent of overall demand in 2012, compared with a 10 percent share in 2011. That’s also higher than the average of a 4 percent share over the past 5 years. Last year, central bank net purchases surpassed certain investment categories of demand. For 2012, total demand for ETFs was 279 tons, while central bank demand was 535 tons. “Central banks are now buying more gold than ETF investors, which is a very startling result,� Grubb said. “Even though demand for bars and coins was down last year, the bar and coin market worldwide was still 1,259 tons, so central banks would have to really go for it to equal bar and coin demand.�

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