Central banks are dipping into the gold market again

(Kitco News) - Central banks from Serbia to Thailand have been adding to gold holdings and Ghana recently announced plans for purchases. This comes as the threat of accelerating inflation looms and a recovery in global trade provides the firepower to make purchases for diversification.

The Bank of Ghana to implement a Gold Purchase Programme designed to purchase locally-produced gold. Vice President Bawumia said the benefits of having a healthy amount of physical gold in a country's reserves are varied and enormous, including shoring up the value of the local currency. The BoG decision, he indicated, is a "game-changer.".

Thailand was the biggest buyer, adding a further 46.7t in May and accounting for a whopping 82% of total net purchases for the month. Turkey also increased its gold reserves by 8.6t during the month, bringing official sector reserves to 415t. Brazil increased gold reserves by 11.9t, its first addition since November 2012. Gold reserves now stand at 79.3t (1% of total reserves) which is the highest level since November 2000. Kazakhstan (5.3t), Poland (1.9t), and India (0.9t) were the other notable buyers during the month