Demand for the precious metal soared last year with net purchases climbing by an additional 651.5 tonnes to reach a total of 4,345.1 tonnes, the largest bought by central banks since 1967. Not only was it 74 percent higher than in 2017 when 4,159.9 tonnes were purchased, but the 2018 total marked the second largest amount purchased on record since 1971. Gold thrived from its safe-haven status as investors turned to the yellow metal in times of uncertainty from Brexit and the US-China trade war. The WGC said in a report: “The world consumed 4,345.1 tonnes of gold in 2018, up from 4,159.9 tonnes in 2017.
“Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets.”
The biggest buyer of gold was Russia, followed by Turkey and Kazakhstan, the WGC said.
And the gold boom could be far from over yet with central banks expected to acquire an additional 600 tonnes this year, according to the consulting firm Metals Focus Ltd.
Shortly after the news, gold rose to its highest in eight months after the US Federal Reserve paused its monetary tightening cycle.
Spot gold was up to $1,323.84 per ounce at 2.45PM UK time, having earlier touched its highest since May 2018 at $1,324.67.
The price of spot gold has gained over 3 percent so far this month.
ABN AMRO analyst Georgette Boele said: “Supporting gold is the double whammy of lower dollar and the (Fed decision on) US interest rates.”
The latest gold rush came after the Fed offered no alterations to its interest rate outlook, instead stating the case for further rate increments had “weakened” in recent weeks.
Gold tends to rise on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.
Elsewhere, palladium gained 1.5 percent to $1,382.
Platinum rose 0.5 percent to $818.65.
Silver gained 0.2 percent to $16.09, having hit its highest since July 2018 at $16.12 earlier in the session.