Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench

Central banks in gold rush

IMG Auteur
 
 
Published : November 22nd, 2011
446 words - Reading time : 1 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : GoldWire

 

 

 

 

Central banks around the globe have joined the gold rush, as the World Gold Council's latest report makes clear. This is especially true of the central banks of rapidly growing emerging countries. Up until the third quarter, the central banks of Russia, China, Thailand and Mexico increased their gold reserves six-fold in comparison with the same period last year, which amounts to a total increase of 148.8 tonnes.

In comparison with the previous quarter, central banks around the world have increased their gold purchases by 114%, with emerging economies in particular looking to sell part of their US dollar reserves. Even though the US dollar registered some gains last week, more investors around the world are becoming dollar-sceptics.

Global investors are increasingly afraid of systemic risks and imbalances affecting economic relations. Many observers fear the outbreak of a global currency war as financially stricken countries try to debase their currencies in order to obtain trading advantages. In this context, markets are focusing on the US. It seems that an increasing number of market participants do not believe that the US is following the necessary strategies to keep a strong currency. The country's economic problems are too big, with the unemployment rate remaining stubbornly high. US president Obama has repeatedly said that from now on the US has to concentrate on creating jobs in the exports sector. In order to do this, it needs a currency that is internationally competitive.

Therefore, many market participants expect the US Federal Reserve (Fed) to start a third round of quantitative easing (QE3). Through renewed bond purchases the Fed would inject more electronically generated money into the financial system. But a large sum of this new money would probably flow into the rapidly expanding markets of the emerging countries, since these regions offer much higher returns to investors than the US or Europe. This could be one of the reasons why central banks in emerging countries such as China, India or Russia are quickly increasing their gold purchases. The communist government of China has been repeatedly warning the US government and the Fed to not extend its bond-purchasing programme if they didn't want China to take protectionist measures against the flood of capital threatening to inundate Asia.

Should the US end up implementing QE3, this would probably lead to the expansion of protectionist measures on a global scale. Both the creation of new money by the Fed and the disruption of international trade relations will probably benefit the gold price in the future. Investors will continue to flee to safe havens such as precious metals or other tangible assets – a point of view also shared by the latest WGC report.

 

 

Companies Mentionned : Metals X |
Data and Statistics for these countries : Russia | Thailand | All
Gold and Silver Prices for these countries : Russia | Thailand | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Something has Changed in Gold St...
14:42neville
No nothing strange has happened in GOLD stocks....absolutely nothing.....The fact of the matter is that you byrne have been playing the man and...
The Revisionist Theory and Histo...
05 Febovertheedge
"The key is in the hand of the U.S. government. It is the same key that was used to lockthe U.S. Mint to silver in 1873, and to gold sixty years la...
First Report since April, 2014
05 FebS W.
Here I was just 2 days ago thinking whatever happened to that evangelical silver guy. Low and behold up he springs, like some spirit from the g...
LBMA Silver “Price”: A Perfect S...
03 FebS W.
There is no doubt that the Comex can be used as a casino for those who want to trade Silver up/or down or maybe some just wish to take a small punt...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
Bron refuses to EVER admit this market is a Casino and the disconnect between Paper and Physical is a big clue to this
LBMA Silver “Price”: A Perfect S...
30 JanS W.
Usually I enjoy Bron's take on things,but to be perfectly honest, I can't understand 95% of what he his on about here. I get the feeling that h...
ANOTHER NAIL IN THE U.S. EMPIRE ...
30 JanDemosthenes0
Very naive and pretentious article! The author thinks he knows everything and yet knows next to nothing. Shale gas producers are neither stupid n...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
I'd say that this was More than a Farce , 5,000 silver futures contracts within a minute or two !!!!! ( some charts indicate NO increase in Vo...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Lara Expl.(Cu-Zn-Au)LRA.V
Revised Resource Estimate Report Filed for Maravaia Copper Gold Deposit
CA$ 0.34+1.47%Trend Power :
Corporate news
Black HillsBKH
Black Hills reports 4Q loss
US$ 50.90-0.59%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
Gasoline Inventories Rose Last Week despite Fall in Production
US$ 24.85-6.44%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel (X) States Ratification of Labor Agreements
US$ 7.94-3.64%Trend Power :
Corporate news
Black HillsBKH
4:34 pm Black Hills Corp beats by $0.04, misses on revs; guides FY16 EPS below consensus
US$ 50.90-0.59%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Reports 2015 Fourth Quarter and Full Year Results
US$ 50.90-0.59%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
TransCanada to Sign Substantial Agreement to Benefit Québec Economy
CA$ 48.65+0.16%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
4Q15 Crude Oil Prices: Fallout for the Energy Sector and SPY
US$ 24.85-6.44%Trend Power :
Corporate news
Comments closed