Gold bars 2012 2
Gold bars. Reuters

Central banks spent 2012 boosting their gold reserves in a bid to protect assets from global economic turmoil.

National Bank of Ukraine (NBU) said Friday it raised the percentage of gold in its reserves this year to 7.72 percent from 4.36 percent a year ago.

Since the beginning of 2012, the amount of monetary gold in Ukraine’s international reserves had increased by 25.5 percent, or 230,000 troy ounces, to 1.13 million troy ounces, as of the beginning of December 2012, the NBU said in a statement.

The bank said it is boosting its gold reserves “to avoid the negative impact of the global crisis on the economic development of the country as it … works on diversifying the components of international reserves in Ukraine.”

Meanwhile, Brazil doubled its gold holdings in two months, buying 17.2 metric tons in October and 14.7 metric tons in November.

The International Monetary Fund said earlier this month that in August and September Iraq increased its gold reserves to 31.07 metric tons from 5.8 metric tons.

In the third quarter, according to the World Gold Council (WGC), the world's central banks bought a total 97.6 metric tons of gold.

In six out of the last seven quarters, central bank demand has been around 100 metric tons, which is a sharp increase from as recently as 2010, the bank said in a statement, adding that through the third quarter of this year, total central bank buying was up 9 percent.

Gold is beginning to re-establish itself as part of the fabric of the financial system. In the medium term, the quantitative easing initiatives in the West and the continuing growth story in the East, particularly in India and China, coupled with the seasonally strong quarter coming up in Asia, are excellent indicators for further growth in the gold market,” Marcus Grubb, managing director of investment at the WGC, said in a statement.

Against a backdrop of continued global economic uncertainty and elections in China and the U.S., it is clear from five-year rising demand trends that gold’s fundamental property as a vehicle for capital preservation continues to endure, as evidenced by this quarter’s increase in global (exchange traded fund) investment, up 56 percent and continued purchasing by central banks, the ultimate long-term investors.”

The world's central banks have been net buyers of gold since 2008.