Russia’s central bank bought about 150 metric tons of the metal this year, announced Governor Elvira Nabiullina yesterday. The pronouncement immediately created buying in the market, prompting gold to rise to a two week high at $1,200 an ounce.
On Thursday, gold, stocks, commodities and the euro/dollar all reacted badly to the weak economic data from China, Europe and the US. The market was reacting to the weaker economic growth data, and the likelihood of deflation, which would hurt gold price.
Gold and silver's sell off has continued this morning. Despite gold's 3.75% and silver's nearly 8.4% fall in January and the continued sell off in futures markets, physical demand remains robust and supply tight.
Given that the crisis shows no signs of abating any time soon, with concerns shifting from Ireland and Greece to Belgium, Portugal and Spain, gold will likely continue to receive safe haven demand for the foreseeable future.