Higher than expected gold consumption by jewellers is expected to drive gold prices up to their highest levels since 2013, a report by independent London-based precious metals consultancy Metals Focus has concluded.
According to the consultancy's report, prices should average $1,310 per ounce in 2019, up from $1,300 per ounce at present, and up from the $1,268 per ounce average seen in 2018.
At the same time, the report expects purchases by central banks stocking up on their reserves to fall by 9 per cent to 600 tonnes following a whopping 75 per cent jump in 2018.
In the meantime, the Russian Central Bank has continued its record-breaking streak of gold purchases into the first two months of 2019, bringing the country's total reserves to nearly 2,150 tonnes.
Accounting for a whopping 40 per cent of central bank purchases in 2018, Russia added over 37 tonnes of bullion between January and February, with demand expected to outpace Russian gold mines' ability to meet requirements. The central bank bought an estimated 275 tonnes of Russian mines' 300 tonne total output in 2018.
Russia surpassed China to become the country with the fifth-largest gold reserves in 2018, with its bullion shopping spree seeing holdings approach third and fourth place Italy and France, who have 2,451.8 and 2,436 tonnes of gold, respectively according to the World Gold Council. The United States and Germany make up the top two, with 8,133.5 tonnes and 3,369.7 tonnes, respectively.
The buildup of Russia's gold holdings took place in a relatively short period, with the central bank having just 267.28 tonnes in 1993, and reserves remaining below 1,000 tonnes until 2014. Since then, holdings have climbed steadily by 200+ tonnes a year. If growth continues at its present pace, Russia could reach and even surpass the record set by the USSR on the eve of the Second World War, when Moscow accumulated some 2,800 tonnes of the precious metal.
