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Even Central Banks Are Buying Gold for the Zombie Apocalypse 

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The instruction manual for surviving a zombie apocalypse is pretty straightforward. Once you\u2019ve kitted out your bunker with canned goods and firearms, get a supply of bullion. You\u2019ll need it to buy bullets and bribe your way out of a death fight in Thunderdome.

That\u2019s a line of thinking you might associate with cranky gold bugs, but it\u2019s not a million miles away from the rationale behind fund flows in the precious metals market right now \u2014 and nations are in the driving seat. Central banks bought 400 metric tons of gold in the September quarter, the World Gold Council reported this week. That\u2019s a record inflow on a par with what they\u2019d purchase over a whole year in normal times.

In the notoriously opaque world of government gold trading, it\u2019s not always immediately clear who the biggest buyers are. Monetary authorities are such big players that they can distort the entire market by showing their hands, one reason that prices plummeted in the 1990s and 2000s when some of the European central banks sold in unison.

There is one obvious factor in common between the declared buyers, however: All are from nations facing serious problems. Turkey, whose lira slumped 52% over the year through September, added 95.5 tons to its gold holdings in the same period. Egypt bought 44.8 tons while its pound fell by 20%. India\u2019s 40.5-ton purchase was matched by an 8.7% weakening of the rupee. Iraq\u2019s dinar is fixed against the dollar, but credit-default swaps protecting against non-payment of its debts surged to nearly 9% in September, even after it bought 33.9 tons of the metal.