Central Banks Stashing Away Gold at Brisk Pace
Published on 03-27-2010 Email To Friend Print Version
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Source: MoneyNews.com
Central banks around the world added 425.4 metric tons of gold to their reserves last year, the biggest increase since 1964, according to the World Gold Council.
That represents a 1.4 percent gain to put their holdings at 30,116.9 tons in total. The increase was the first since 1988.
Central banks in India, Russia and China were among those boosting their gold reserves last year, as the precious metal jumped 24 percent, hitting a record of $1,226 an ounce in December.
Central banks now possess 18 percent of all gold ever mined.
“There’s clearly been a renaissance of gold in central bankers’ minds,” Nick Moore, an analyst at Royal Bank of Scotland, told Bloomberg.
“It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”
Many are now singing gold’s praises, with the precious metal up about 3 percent so far this year.
“Gold is quietly, at the edge, becoming the world’s second reservable currency, supplanting the euro and rivaling the dollar,” money manager Dennis Gartman wrote in his Gartman Letter, obtained by Bloomberg.
“The trend shall continue months, if not years, into the future.”
David Skarica, editor of The Gold Stock Adviser, tells Moneynews.com that central banks will continue to buy gold.
“The next lot sold by the IMF (International Monetary Fund) will go to China’s central bank,” he said. “The IMF has a supply overhang.”
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