Money Morning Global Resources Specialist Peter Krauth stated in his 2013 gold price forecast that the yellow metal was headed to $2,200 an ounce next year, with one of the main price drivers being the increased rate at which central banks are buying gold.
As a group, central banks will have bought about 500 tons of gold this year, the most in more than 40 years. More large purchases are expected in 2013.
Foremost amongst the gold buyers are the central banks of emerging economies around the globe. Recent years have seen purchases by Russia, South Korea, Mexico, India and, as most believe, China.
Another country joining the party, or in this case the carnival, is Brazil.
According to the International Monetary Fund, Brazil raised its gold reserves for the second month in a row in October. Brazil made its first significant gold purchase in more than a decade in September. It expanded its gold holdings by a hefty 17.2 tons last month to 52.5 tons.
This is the largest amount of gold Brazil has held in more than 11 years, since January 2001.
So why is Brazil jumping aboard the bandwagon now and buying gold at a record pace?