NEW YORK (Commodity Online): Russia’s gold reserves advanced by 15.5 tons to 911.3 tons in May this year and Turkey’s yellow metal holdings raised by 5.692 tons to 244.986 tons, as per latest International Monetary Fund’s (IMF) international finance statistics report.

According to the IMF data, Ukraine and Kazakhstan also increased their holdings of the gold in May when the metal averaged $1,587.68 per ounce. Ukraine’s gold reserves rose by 2.1 tons to 32.7 tons and Kazakhstan boosted their yellow metal reserves by 1.8 tons to 100 tons.

Mexico, Philippines and South Korea are among the other countries to have added to their gold holdings in recent months.

Central banks are expanding reserves due to the Eurozone debt crisis and concerns about fiat currency debasement. Central banks are on course to buy more bullion this year than the purchases of about 456 tons in 2011 as countries diversify their reserves.

Turkey has allowed banks to hold more of their reserves in gold to provide extra liquidity. The central bank this month raised the proportion of reserve requirements that can be held in foreign exchange to 50% from 45%, while the limit for gold was increased to 25% from 20%. The changes will add as much as $2.2 billion to gold reserves.

According to the World Gold Council, gold accounts for about 9.1% of Russia’s total reserves, 5.1% of Ukraine’s and 15% of Kazakhstan’s total reserves.

As per Bisengaly Tadzhiyakov, deputy chairman of the Kazakhstan’s central bank, said that, “Country plans to raise the amount of gold it holds as part of its reserves to 20 percent”.

Central bank demand and Chinese demand alone should be enough to put a floor under prices near these levels and gold looks well positioned for another summer rally akin to the one seen last July and August.

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