Barry Stuppler

Ever since the eurozone bond markets first started to get the jitters, hedge fund managers have been whispering that gold could play a part in resolving the crisis. Until recently, this discussion has mainly been the preserve of gold market conspiracy theorists and backbench German politicians. But now the use of gold to fund a eurozone bail-out is coming closer to reality...

Central banks made their largest purchases of gold in decades in the third quarter, as a sharp drop in prices in September accelerated the shift to bullion as a means of diversification. The scale of the buying, at 148.4 tonnes on a net basis, was far bigger than previously disclosed, surprising some traders. The data were published in a quarterly report by the World Gold Council, a lobby group for the gold industry, on Thursday.

The WGC declined to identify of the central banks behind the majority of the buying citing “confidentiality restrictions”, saying only that....