Lines Around The Block To Buy Gold In London; Banks Placing "Unusually Large Orders For Physical"

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"The bullion market has been building with interest since the end of last year but this morning things have gone bananas," said Mr Halliday-Stein. "Some London banks are placing unusually large orders for physical gold."

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But that's just part of the story. As reported by the World Gold Council, the buying really started to pick up in the fourth quarter, courtesy of the Chinese and central banks.

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Central bank buying accelerated sharply in the second half of last year and jumped 25 percent in the fourth quarter, from a year earlier, as the need to diversify was reinforced by falling oil prices and reduced confidence in the global economy, WGC said.