Friday, August 19, 2011

Central Banks’ Demand For Gold Quadrupled In 2nd Quarter

Not only are Central Banks accelerating their purchases of gold, they are now withholding their mining supply from the market (China), nationalizing gold mines (Venezuela), and demanding the bullion banks return their gold.
We ain't seen nothing yet.

LONDON (Dow Jones)–Central banks are topping up their gold reserves, quadrupling their total purchases from the market in the last quarter as they seek to reduce their dependence on traditional reserve currencies such as the U.S. dollar.

Even with gold prices at record highs, emerging markets’ central banks have revived the official sector’s gold-buying interest. They are diversifying their foreign exchange reserves, which have grown along with their export industries. More recently, they’ve also bought gold in reaction to the persistent sovereign-debt crises affecting traditional reserve currencies, like the dollar and the euro. Analysts say this trend is likely to continue.
"We expect to see additional demand support from official-sector purchases as numerous influential countries are becoming bearish on the status of the U.S. dollar as a reserve currency," said analysts at Swiss bank Credit Suisse.
Central banks bought 69.4 metric tons of gold in the second quarter, more than four times the 14.1 tons reported a year earlier, the World Gold Council said Thursday.
During the first half of the year, central bank gold purchases totaled 192.3 tons, more than 2 1/2 times the 72.9 tons bought in the first six months of 2010, the council said.
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