Central Banks Are Now Buying Gold PDF Print E-mail
Written by Kathryn Smith   
Monday, 17 May 2010 13:40
After the Reserve Bank of India decided to buy 200 tons of gold from the International Monetary Fund last year, many other Central Banks have started to buy this precious metal.
by KathrynSmith


After the Reserve Bank of India decided to buy 200 tons of gold from the International Monetary Fund last year, many other Central Banks have started to buy this precious metal.

India's move determined the gold prices to climb up and stay there. India's move triggered a trend among the Central Banks that have begun to buy large amounts of precious metal.Several countries are doing this. Russia, for example, has been investing in the glittering metal for 20 years and so have the Philippines and Venezuela. The important aspect is that they are buying the yellow metal from the local production, using local currency and thus adding to the reserves or selling it on the market. Whatever they do with the gold after purchase the bottom line is that they are investing in their own economy.

For the first time in two decades that the Central Banks have become the buyers and not the sellers. The main reason why the Central Banks have become so interested in purchasing the yellow metal is because they were caught off-guard by the worst financial crisis since the great depression. The best example for a country that has made the most serious buys in the gold sector is China. The country has raised its reserves to 1.054 tons.

It has become clear that this precious metal has become an important asset that we must include in our portfolio. We should try to invest part if not all of our savings in the yellow metal because its prices cannot fluctuate like the prices of the paper currencies.

There are many ways in which one can invest in the precious metal, from gold accounts to shares or even physical gold like coins or bars. Gold is and will be an important part of the economy and now it is rated at high prices so this is the perfect time to invest. So do a little research and start buying.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

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