In a world in which currency devaluation has become the chief weapon against growing deflationary forces, numerous nations are making concerted efforts to stock up on gold reserves and keep it closer at hand for emergencies.

According to the Bloomberg news agency, which cited International Monetary Fund statistics for December, the former Soviet republic of Kazakhstan was the biggest buyer in the last month of 2015, padding its gold reserves by 16% versus a year earlier with a purchase of 7.13 million ounces.

Another 200-ton year for China?: The major buyers in the past few years continue to be Russia and China. Beijing added 19 metric tons in December, increasing its second-half 2015 purchases by more than 100 tons, while Russia acquired even more, increasing its total reserves by 208.4 tons over 2015.

Their gold investments have become a familiar theme, according to the World Gold Council, and with the Russian ruble weakening and China expected to devalue the yuan further to stimulate its economy, bullion should continue to be an important financial hedge.

In fact, Barclays is predicting that the Peoples Bank of China likely will buy as much as 216 more tons of gold this year. Its continued focus on acquiring bullion is particularly impressive given that Chinas total forex reserve has recorded large declines in the past year, it said.

Well still see central banks as net buyers, saidDaniel Hynes of the Australia & New Zealand Banking Group Ltd. Markets have been so volatile over the past six months, I suspect there may be some component of safe haven-buying, but essentially its related to diversification.

Germany hauled back 210 tons in 2015: Meanwhile, other central banks are working to tighten control over their existing gold holdings. Germanys Bundesbank has been at the forefront of a recent movement in which sovereign nations are repatriating their gold held in elsewhere, such as New York, Paris, and London. Germanys gold, for example, wound up being stored in other countries largely as a precautionary measure during the Cold War era, when the Soviet threat loomed larger. With concerns growing about the European Unions stability and economic health, Germans have recently clamored for the return of their national treasure, which totals 3,381 tons, the second-largest sovereign bullion reserve after the U.S.

Now the Bundesbank has announced the transfer of about 110 metric tons of gold from Paris and just under 100 tons from New York to its Frankfurt vaults in 2015. It plans to bring another 307 tons of the precious metal home in the next five years, Bloomberg noted.That means slightly more than half of Germanys gold will be held within the country by 2020, about a third at the Federal Reserve and the remaining 13% at the Bank of England.

In safe hands is paramount principle: The latest moves now mean that over 3 years from January 2013 to December 2015, the Bundesbank has retrieved 366 tonnes of gold back to home soil (189 tonnes from New York (5 tonnes in 2013, 85 tonnes in 2014, and between 99-100 tonnes in 2015), as well as 177 tonnes from Paris (32 tonnes in 2013, 35 tonnes in 2014, and 110 tonnes in 2015), Ronan Manly of BullionStar wrote. The latest transfers still leave 110 tonnes of gold to shift out of New York in the future and 196.4 tonnes to move the short distance from Paris to Frankfurt.

Proof that it is still in safe hands is important for many Germans, Reuters added. The Bundesbank said all gold bars are thoroughly and exhaustively inspected and verified on arrival.

Whether in Asia or Europe or elsewhere around the world, central banks are increasingly concerned about acquiring golden protection from rampant currency wars and devaluations, and they are not settling for third parties to store their sovereign wealth any longer. Individuals should be taking a page from this precautionary book and follow suit by acquiring adequate gold allocations and keeping the metal in safe, secure, and accessible storage.

Add precious-metals analytical firm GFMS to the list of forecasters who are predicting a potential rebound in gold prices in 2016.

The firm, owned by Thomson Reuters, just published the fourth-quarter update to its widely followed Gold Survey 2015 analysis.

In 2016 GFMS sees gold prices, currently near $1,100 an ounce, recovering to above $1,200 an ounce by year-end, and averaging $1,164 an ounce in the full year, its parent news agency reported. Gold demand is expected to grow by 5% this year.

Second half of 2016 could shine: Earlier this year, in a bullish analysis, GFMS argued that gold mining supply likely peaked in 2015 and would fall 3% in 2016. Golds picture also could brighten based on Chinese demand as well as sinking expectations about the pace of the Federal Reserves rate-hiking program, the firm wrote in its new update.

While gold is likely to remain under pressure for some time, the prospects look brighter for 2016, particularly in H2, GFMS argued, predicting a rebound in pent-up demand from Asia and a further contraction in global mine production.

Slowing Chinese growth and the negative outlook for the yuan should benefit gold in the medium term, and once there are clear signs of a price recovery, or at least a stabilization, we should see investors coming back into the market, it said.

Fewer Fed rate hikes are likely: Moreover, the market has been arguably pricing in four U.S. rate rises this year. However, given a weak economic recovery and highly accommodating stance of monetary policies outside the United States, we are likely to see only two small rises. This should again strengthen market sentiment, the firm wrote.

We expect a slow recovery in 2016 in dollar terms, with the gold price trading above $1,200/oz towards year-end, and averaging $1,164/oz.

The report noted continuing increases in Chinas official-sector gold holdings, as well as purchases by other banks on the mainland.

Moreover, demand for gold bars rebounded in the second half of 2015, especially in the final quarter.

Weaker yuan to boost gold demand: GFMS also argued that the Chinese yuan, or renminbi, currency likely will be weakened further by authorities in order to steer the economy out of its current slowdown.

There remains a common view in the Chinese market that it is very likely that the yuan will continue to depreciate over the course of 2016. Once it becomes clear that the yuan is on a depreciating trend, Chinese people are likely to start buying more physical gold to preserve their wealth. This move should benefit the gold price in RMB terms, and further widen the spread between the local and the dollar gold price. Indeed, with increasing demand from both the official and retail sectors ahead of the spring festival, a transient, but solid recovery in the Chinese demand should be ensured at least until the end of the first quarter of this year.

Indias 4Q demand explodes: Meanwhile, the worlds other major gold consumer, India, hasn’t lost its appetite for the yellow metal. Jewelry consumption in India increased 14% year-on-year to 203.7 tonnes in Q4 2015, the highest since Q3 2008 and the highest fourth-quarter demand on record. Meanwhile retail investment increased by 18% year-on-year to 52.2 tonnes, the highest since Q4 2013. Festive and wedding-related demand helped buoy consumption.

Gross official imports into the country in Q4 2015 were 246.6 tonnes, 16% lower year-on-year. Annual imports were 904.5 tonnes, 10% higher than 2014.

By GFMSs accounting, India in fact remains the worlds largest gold buyer, retaining that crown for the second straight year thanks to record high jewelry consumption at 703 tonnes.

Next resistance level is $1,140: The firm sees the $1,040 level as a key support level for gold and praised the metals resilience. The next level to the upside is the lowered ceiling at around $1,140/oz and beyond that $1,180-$1,200/oz zone.

The U.S. dollar remains a headwind for gold, but the firm thinks the top could be in for the greenback, noting that it will be quite challenging to break the 102 level for the dollar index. In addition, the recent breach above 100 arguably reflected a more favorable global economic environment. However, that strong sentiment has waned and driven by continued weakness in the equity markets, gold could find some strength during the rest of this year, which would indicate a bottom has been formed.

Overall, GFMS has issued a relatively positive outlook for gold prices, giving further reasons for a rebound as 2016 progresses.

The widely followed GFMS precious-metals consultancy just issued an update to its Gold Survey 2015 report, and its bullish-leaning conclusions about bullions prospects depend highly on future gold consumption in China.

Now is good time to be confident about Chinese gold demand because much of Asia is buying bullion and jewelry ahead of the Lunar New Year holiday in early February. Gold is purchased on a wide scale for the celebrations, so January historically is a strong month for price gains.

Depreciating yuan to boost gold: But GFMS has more entrenched reasons to be bullish. The firm is predicting that the Chinese government will be forced to maintain its recent yuan-devaluing measures in order to bolster its slowing economy and plunging stock market. There remains a common view in the Chinese market that it is very likely that the yuan will continue to depreciate over the course of 2016, its analysts wrote. Once it becomes clear that the yuan is on a depreciating trend, Chinese people are likely to start buying more physical gold to preserve their wealth.

If Chinas recent import figures from Hong Kong are any measure, gold demand in the worlds top consumer alongside India is alive and well. Chinas imports of gold from Hong Kong surged 67% to the highest level in more than two years in December as stock market turmoil and anticipation of a further weakening in the nations currency spurred demand for a haven, Bloomberg reported.

Purchases increased to 111.3 metric tons in December from 66.8 tons in November and 58.8 tons in December 2014. But Hong Kong gold import data are just one metric used to gauge overall Chinese demand, and its an imperfect one at that.

China sucking up global mining output: In the past couple of years, analysts have placed increased scrutiny on the withdrawals and deliveries on the Shanghai Gold Exchange. That major bourse reported withdrawals at 2,596.4 tons overall in 2015, up from the record set in 2013, when 2,197 tons were withdrawn. Withdrawals, it has been argued, are a true measure of demand.

As Jesses Caf Americain blog recently noted, the Shanghai Gold Exchanges total withdrawals in 2015 now account for 91% of annual global gold production.

[However, amid new concerns that China has stopped publishing Shanghai Gold Exchange statistics in 2016, its unclear whether outside analysts will have access to this window in the future.]

Meanwhile, another key demand figure exports of gold to China from Switzerland, an important global refinery hub jumped to 59 tons in December from 16.5 tons a month earlier, Bloomberg also noted, citing Swiss customs figures.

China maintains discreet gold flows: And Hong Kong and Shanghai are not the only access points for the gold trade. As a Reuters story from April 2014 revealed, China also has been importing gold into Beijing.

China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the worlds top bullion buyer discreet, the news agency reported.

Meanwhile, other media agencies have suggested that China is acquiring gold through unofficial channels that go unrecorded in official trade statistics. In an article about a Chinese militarized unit tasked with exploiting the nations gold reserves, PopularMilitary.com quoted from a book by noted gold expert and author Jim Rickards. According to the passage, Rickards wrote:

A senior manager of G4S, one of the worlds leading secure logistics firms, recently revealed to a gold industry executive that he had personally transported gold into China by land through Central Asian mountain passes at the head of a column of Peoples Liberation Army tanks and armored transport vehicles. This gold was in the form of the 400-ounce good delivery bars favored by central banks rather than the smaller one- kilo bars imported through regular channels and favored by retail investors.

The point of all these details about possible Chinese entry points for gold imports is to say that if one or two facets of Chinese gold demand are already off the charts, then true bullion consumption there could likely be much greater than we can get our heads around.

Gold and stocks usually move in opposite directions, but on Tuesday, both asset classes were swimming higher with the tide.

Chinas 6% overnight stock slump helped buoy gold prices early Tuesday, and the price advanced by about 1.5% as the day progressed, topping $1,120 to hit three-month highs unseen since early November. Silver also gained about 2%, reaching six-week peaks near $14.58.

Whats driving gold now? As the Federal Reserve started a two-day meeting Tuesday, many analysts are banking on the central bank turning dovish because of the growing global economic slowdown.

Feds rate-hike pace to cool: Fundamentals continue to turn more favorable with lower bond yields, a slowing pace of U.S. rate hikes, and underinvested funds all supporting the move higher, Saxo Banks Ole Hansen told Reuters.

A note from HSBC also suggested that U.S. interest rate futures indicate the Fed may only raise rates one more time this year.

James Cordier of Optionsellers.com agreed, saying, The premonition that four rate hikes are supposed to happen in 2016 are dwindling down to two or maybe one rate hike, and thats giving gold a boost.

And in widely disseminated comments, DoubleLine Capital bond guru Jeff Gundlach warned that if the Fed doesnt back off its hawkish rate-hiking path, the markets are going to humiliate them.

Were in a bubble, Trump says: Stocks and oil also rose Tuesday, with the Dow Jones average up about 250 points at midday and crude prices back above $32 a barrel.

But dont necessarily assume that stock prices will continue to rally. Confirming what former Dallas Fed chief Richard Fisher said earlier this month namely, that the central bank juiced a tremendous stock market bull run with money printing GOP presidential candidate Donald Trump repeated a warning that stocks are in a bubble.

Were in deep trouble. The countrys a mess, Trump told ABCs Good Morning America program. Were in a bubble. And, frankly, if theres going to be a bubble popping, I hope they pop before I become president because I dont want to inherit all this stuff. Id rather it be the day before rather than the day after, I will tell you that.

Gold easily at $1,400 in time: Whats not in a bubble? Gold.One of the grand old men of the gold-investing world just issued a bullish statement on golds prospects, partly because he sees a renewed interest in bullion from Wall Street.

I think gold actually is going to start to stabilize, RBC Capital Senior Vice President George Gero told Bloomberg.

Im guessing (gold goes) higher this year; Im guessing probably higher the next couple of years. I think what were seeing this year are new factors. For five years the funds did not need gold or want gold because they were very happy with equities. For the first time in many years the fund managers that have really not been interested in gold are going to become interested in gold if we hold this $1,100 area. Also, gold has been acting like gold should as a contrarian to the stock-market volatility.

I think gold can get over to the $1,400-$1,500 area easily. I dont think thatll be a problem in the next few years, but I think its going to do that slowly this time.

Gero thinks the Fed is likely to be more dovish at its meeting this week because look at all the job cuts. Sprint today announced (layoffs); Walmart is closing stores, Macys closed stores, banks are laying off people. So while we had a beautiful 5% jobs figure, that may not continue either.

Stay tuned for Wednesdays announcement from the Fed concerning interest rates and the general state of the U.S. and global economies. If the Fed sounds pessimistic on the financial landscape, gold could continue its uptrend higher.

If youre looking for safe-haven assets, dont mistake gold-mining stocks as a substitute for gold bullion, suggests a new study by two economic scholars.

In a paper titled Are gold bugs coherent? Brian Lucey of the Trinity School of Business and Fergal OConnor of York St. John Universitys Business School compare the relationship of gold bullion prices (measured by the daily closing price of COMEX 100 oz. gold) versus gold mining stocks (as measured by NYSE ARCA Gold Bugs index) from 1998 to 2015.

Their conclusions? This paper finds that gold prices in general lead the NYSE ARCA Gold Bugs index of gold miner share prices when we look at periods of one year or greater. This fits well with recent studies, such as OConnor et al. (2015), who have found that gold prices also lead gold mine production costs. Both sets of results imply that miners do particularly well in a rising price environment as the gap between costs and prices widens in their favor, and vice versa. However, as it is gold that leads the relationship, the ability of gold miners stocks to provide the diversification or safe haven benefits attributed to gold is again called into question.

Every investors core gold holding should be in physical bullion, not gold mining stocks, futures contracts, options, or even gold-linked exchange-traded funds. Physical gold is an asset thats always there when you need it; everything else is just a paper or electronic promise. Gold stocks and ETFs are not bad investments; on the contrary, the latter are useful as trading devices, while the former can offer even more leverage on a rising bullion price (if youve picked the right company). But one holds gold for its attributes as real physical asset that can serve as financial insurance and as a crisis currency. Mining stocks and ETFs pale in comparison to physical bullion in this respect.

Nearly $8 trillion has been sucked from the carcass of the 2016 global equity market so far, and despite the solid pulse in recent days, nobodys in a celebratory mood just yet, wrote Shawn Langlois at MarketWatch on Monday.

In contrast, the spot gold price is one of the bright lights in the investment world in 2016. Gold remains the best performing metal on the Bloomberg Commodity Index, which measures 22 materials, in 2016. Its risen 4% this year, Bloomberg reported.

In fact, Bloomberg was forced to admit in a separate story that gold is back in fashion after a $15 trillion global selloff with that $15 trillion figure tallied by tracing stock losses all the way back to May 2015.

The news agency notes that gold is attracting new interest from hedge funds, which more than doubled their net-long position in bullion last week, while holdings in gold-linked exchange-traded funds are expanding at the fastest pace in a year.

Time to add gold to your portfolio: People have become complacent about risks, whether its macroeconomic and geopolitical, George Milling-Stanley of State Street Global Advisors told Bloomberg. Whats out of fashion may be coming back. That atmosphere of people feeling completely calm and untroubled, I think, is starting to go away. Gold is a very good risk-off trade, and I think people are starting to look very, very carefully at the risky positions that they have on a number of other markets.

Golds outperformance so far this year suggests that investors are rebalancing their portfolios in light of the carnage on equities. An entry price here nearer to $1,000 than $2,000 makes a lot more sense, said Kevin Caron of Stifel Nicolaus & Co.

10 reasons why gold can thrive: Blanchard and Company has already noted how numerous punch-drunk stock investors in China are running from sinking equities and returning to gold and other safe havens. Just imagine how the tide could shift back into bullions favor when hundreds of thousands of Western investors realize that much of the stock market bull of the past few years has been the product of the Federal Reserve artificially inflating the markets with cheap money. Without that support, equities have dropped like rocks.

For more arguments on why gold could rebound even more strongly in the coming months, see this article from ValueWalk titled Top 10 reasons gold may shape up for a surprisingly strong performance in 2016.

1. The U.S. dollar is a crowded trade.
2. Foreign demand for U.S. Treasuries is declining.
3. U.S. recessionary warnings are flashing.
4. The U.S. credit cycle is turning.
5. U.S. equity markets are richly valued and breadth is thin.
6. The gold complex is experiencing bullish divergences.
7. The physical markets for gold are establishing a durable price floor.
8. The gold price should reflect the bloated Fed balance sheet and federal debt levels in 2016.
9. Gold is diverging positively from the commodity pack.
10. Extended Commodity Futures Trading Commission (CFTC) positioning bodes well for short-term prices.

The biggest economic report for Monday delivered a Texas-size shock and helped gold prices trade near 12-week highs above $1,100.

Falling oil prices continue to pressure U.S. stocks, and declining equities in turn bolstered gold. The painful effect of collapsing oil prices on the overall economy is felt perhaps nowhere as acutely as in Texas, and the Dallas Federal Reserves most recent economic-activity report confirmed that all is not well in that major energy-producing state.

Manufacturing activity in the Lone Star state suffered its biggest monthly contraction in nearly seven years as the fallout from the collapse in global crude prices ripples across its industrial sector, the Financial Times reported.

The headline general business activity index fell to -34.6 in January, its weakest level since April 2009. … This compares to the revised -21.6 reading in December and is far worse than economists expectations of -14.5. The drop marks the 13th consecutive month in which the index has languished in negative territory. A reading below zero signals contraction. The last time the index suffered a longer negative streak was the last U.S. recession when it endured 25 straight months.

Depression is far-reaching: One Fed respondent lamented, We expect thecontinued depressionin the oil and gas industry to negatively impact our customer base and result in significant demand reduction.

Lindsey Group analyst Peter Boockvar was expecting a bad report and we got that and then some, he wrote. Bottom line, the data speaks for itself and reflects the major recession the energy patch is in and the ripple effect on other industries.

Accordingly, all the major U.S. stock indexes were down by Monday afternoon trading. The losses in equities bode well for gold. The metal was trading near its 200-day moving average of $1,109.

Given the turbulence in financial markets, the Fed might not be able to hike interest rates too many times in 2016, Mark To of Wing Fung Financial Group told MarketWatch. If gold can stay above $1,100 in the coming days, it may signal a further rebound, maybe even to $1,200 in the coming months.

Gold could target $1,140 on Asian buying: And staying above $1,100 is an achievable feat given the approach of Chinas Lunar New Year holiday, which is celebrated in Asia by purchasing gold. Standard Bank, for one, is predicting that the bullion price could run up to $1,140 as the holiday approaches, although its since added that that target has become more of a challenge.

Meanwhile, the Federal Reserve is set to meet Tuesday and Wednesday this week, after which it will announce any changes to its interest-rate policy. However, since market turbulence has followed in the wake of its December decision to raise rates by a quarter point, its not expected to act again this week.

Although it was planning to hike rates as many as four times this year, the risks to that outlook are rising, Reuters reported. Investors have already pushed their expectations for a second rate rise deep into 2016, and Fed officials have begun to air their concerns about factors such as the recent drop in inflation expectations. If the steady drumbeat of bad news about the markets and the global economy continues, it could force the U.S. central bank to rewrite its plan for more rate hikes this year.

Summers says 4 hikes unlikely: Former Treasury Secretary Larry Summers, himself a former potential candidate to replace Ben Bernanke as head of the Fed (a job that eventually was awarded to Janet Yellen), is among those critics warning against the idea of four rate hikes this year.

Ive thought consistently that it was not a confident bet that the economy could withstand four rate increases this year and continue to grow robustly and continue to provide support for a very weak global economy, Summers told CNBC. Certainly the way markets have moved this year has done nothing but support the view.

The markets have never believed the Fed on the Feds expansion [on rates], he argued. I think the Fed has quite been very unwise when it has criticized markets for not believing it because … markets reflect the collective judgment of a number of people. It seems to me there was substantial grounds for concern.

Bottom line: The cracks in the economy are showing. Just look at Citis Economic Surprise Index, which is in negative territory, thus indicating that economic news has been worse than expected. With the U.S. economy increasingly falling susceptible to deflationary winds, the Fed is likely to hold off on another rate hike for the near future, and the central banks loose monetary policies will continue to support gold prices, which tend to thrive in low-rate environments.