A major gold-buying spree by central banks is likely to persist in the coming years, according to Australia & New Zealand Banking Group Ltd., which flagged the potential for further purchases by nations including China.

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In the current environment, where uncertainty in emerging-market currencies is high, we see good reason for countries like Russia, Turkey, Kazakhstan and China to continue to diversify their portfolios, ANZ said in a note on Tuesday. Net buying by the sector is likely to stay above 650 tonnes, it said.

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Central-bank accumulation of bullion has emerged as a increasingly important trend in the global market, offering additional support for prices that have rallied to the highest level since 2013 on rising demand. Authorities have been adding to reserves as growth slows, trade and geopolitical tensions rise, and some nations seek to diversify away from the dollar. Official purchases now account for about 10 per cent of worldwide consumption, according to ANZ.

The Peoples Bank of China holds nearly 1,936 tonnes of gold, which equates to only 3 per cent of its total foreign reserve holdings, giving the country plenty of room to increase its allocation, ANZ said. China’s central bank expanded bullion reserves again in July, pressing on with a run that stretches back to December.

Central banks added 374.1 tonnes in the first six months, helping push total bullion demand to a three-year high, according to the World Gold Council. The trend is expected to continue, with a recent survey of central banks showing 54 per cent of respondents expect global holdings to climb in the next 12 months.

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