Gold Price Buoyed By Central Bank Buying
August 2, 2012
By James O'Dell
Los Angeles, CA. – Morgan Gold - Gold and Silver prices retreated on Thursday with the price of Gold slipping below the $1,600.00 an ounce level and now trading at $1,588.00 an ounce, while the price of Silver is at $27.05 an ounce, as investors were disappointed once again after European Central Bank (ECB) President Draghi followed the lead of Fed Chief Bernanke in doing little to change the current financial landscape. This follows, of course, Draghi's bold statement that he would "do whatever it takes to preserve the euro," and even punctuated it with "and I promise, that will be enough."
Investors must now wait at least until September when many analysts are predicting the Fed will launch additional stimulus. While Gold prices may have fallen modestly after the Fed failed to act in changing policy at the latest FOMC meeting, Gold prices will likely climb in the medium- to long-term as central bank buying of Gold bullion heats up, say analysts.
Official sector Gold purchases come at a time that has been beneficial for Gold, in March, when central banks bought 76.5 tons of the yellow metal, Gold was prevented from a sub-$1,600 an ounce move. A similar occurrence happened in May, when central banks purchased 19.3 tons of bullion, establishing a floor in the Gold price at $1,530 an ounce. South Korea is the latest central bank to boost reserves, adding 16 metric tons of Gold in July. The purchase pushed the South Korean central bank to rank 40th in the world in Gold reserves in July, up from 43rd in June, as it lifted its total Gold reserves to 70.4 tons.
"Gold is a safe-haven asset so higher exposure to Gold can boost the credibility of our foreign reserves," said Lee Jung, of Bank of Korea. Central banks currently hold one-sixth of the Gold bullion ever mined and with the lull in Asian jewelry buying and western hedge funds having stepped aside this year, they have had a positive impact on the Gold market this year. Led by emerging markets in Asia and Latin America, central banks are now buying more Gold, than at any time in the past forty years. Protect your wealth and your retirement, during these times of economic and geopolitical uncertainty, by investing in physical Gold and Silver bullion.
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