Iraq Buys 36 Metric Tons of Gold Worth $1.56 Billion

by on March 25, 2014 7:59 pm BST

Iraq purchases 36 metric tons of gold worth roughly $1.56 billion and making it the largest purchase in three years. The Central Bank of Iraq made the purchase in order to help stabilize the Iraqi dinar against foreign currencies. As of August, gold reserves were cited at 29.8 tons, according to the International Monetary Fund (IMF).

The World Gold Council lists Iraq as the 40th-largest bullion holder, and the central bank said it has no intentions of selling any of their gold assets. Although, gold bullion only represents two percent of Iraq’s total reserves, compared to 70 percent in the US.

The large purchases made by central banks over the last year, most notably by China, indicates there is still demand for the precious metal and not a “barbarous relic” as some may think.

Central bank accumulation of gold has seen a pick up in activity with over 900 tons purchased in the last two years. The World Gold Council stated that central banks will continue to purchase high quantities of gold at current prices. GoldCore’s Mark O’Byrne said “they see it as an important asset diversification and a safe-haven element within foreign-exchange reserves.”

Gold has seen an increase by 9.1 percent this year, after the massive profit taking after reaching $1,392 per ounce.