Official global gold reserves continued to grow at a rapid pace this year, with demand for the precious metal reaching 1,123 tons in the second quarter of 2019.

A report released by World Gold Council (WGC) on Thursday showed that central banks purchased a record $15.7 billion (374 tons) of gold in the first six months of the year. That was the largest acquisition of gold recorded by WGC in its 19-year quarterly data releases.

The record gold-buying was led by Russia, China and Poland, the report said, as many countries seek to diversify reserves away from the US dollar.

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Gold demand increased to more than 2,181 tons in the first half of 2019, a rise of eight percent on the same period last year. Global demand was driven by strong recovery in India’s jewelry market due to a “busy wedding season and healthy festival sales in the country.”

The price of gold rallied in June, breaking through $1,400 per-ounce for the first time since 2013. Among the factors driving the rally were expectations of lower interest rates, and political uncertainty, with a further boost coming from strong central bank buying, the WGC said.

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“June was a big month for gold. The price broke out of a multi-year trading range to hit a six-and-a-half year high and gold-backed ETF assets-under-management grew by 15% - the largest monthly increase since 2012,” said Alistair Hewitt, Head of Market Intelligence at the World Gold Council.

He continued: “While the Fed’s dovish turn was a key driver for this, it also builds on a strong H1 which saw gold demand hit a three-year high, underpinned by extremely strong central bank buying. But we also saw an uptick in sales at an individual level, as investors took advantage of June’s price rally to lock-in profits; jewellery recycling and retail bar and coin liquidations both rose.”

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The WGC expects looser monetary policy and geopolitical uncertainty to continue pushing central banks to build gold reserves in the second half of the year, while consumer demand “may be a bit soft, as people adapt to the higher price level.”

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