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Almost 400 tons were scooped up by central banks in the third quarter, more than quadruple the amount a year earlier, according to the World Gold Council. Image Credit: Ahmed Ramzan/Gulf News

Central banks bought a record amount of gold last quarter as they diversified foreign-currency reserves, with a large chunk of the purchases coming from as-yet unknown buyers.

Almost 400 tons were scooped up by central banks in the third quarter, more than quadruple the amount a year earlier, according to the World Gold Council. That takes the total so far this year to the highest since 1967, when the dollar was still backed by the metal.

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Bullion prices have been pressured this year by aggressive US interest-rate hikes as the Federal Reserve tackles soaring inflation, which have prompted exchange-traded fund investors to sell the non-yielding asset.

Central banks buying gold

But support has come from other areas, such as retail buyers in Asia and central banks.

Central banks including Turkey and Qatar were among recent buyers, as well as unreported purchases from institutions — which the WGC said that although isn't uncommon, amounted to a "substantial" estimate.

Not all countries report their gold purchases regularly, including major ones like China and Russia.

"Not all official institutions publicly report their gold holdings, or may do so with a lag," the WGC said in a quarterly report released Tuesday. "We can't rule out further unreported buying."

The council expects overall investment for gold to decline this year, as lower ETF and over-the-counter demand offset strong retail buying.