Central Bank Gold Buying More Than Doubled Says WGC
August 17, 2012
By James O'Dell
August 17, 2012, Los Angeles – The price of Gold climbed 0.72 percent or $11.60 to close at $1,613.90 an ounce on Thursday, after an unexpected advance in weekly initial jobless claims and a slide in U.S. housing starts for July improved expectations that the Fed would boost accommodations. The price of Silver rallied 1.33 percent or $0.37 to close at $28.16 an ounce, while the Gold/Silver ratio, the number of ounces of Silver it takes to buy one ounce of Gold, fell to 57.31, as Silver outperformed Gold.
The World Gold Council (WGC) reported that Gold purchases, by central banks, were running more than twice the rate seen at this same time last year. The WGC said the increase in central bank purchases showed that “through all the uncertainty, it is clear that Gold’s fundamental properties as a vehicle for capital preservation and a source of liquidity continue to endure.” Central banks are the “ultimate longer-term investors,” added the WGC.
Meanwhile, Minneapolis Fed Bank President Kocherlakota, in response to a question by an audience member at a speech in Williston, North Dakota on Thursday, said he felt the Federal Open Market Committee (FOMC) went too far when it promised to keep the central bank's primary interest rate near zero through late 2014. “I would not have chosen to put that date as far out as the committee has chosen,” said Kocherlakota. The Fed held off adding stimulus to the economy at its August FOMC meeting, while it kept its key rate in the same range of zero to 0.25 percent, where it has been since 2008, and where it will remain at least through late 2014.
In the euro zone, German Chancellor Merkel has just given her "conditional" support for more action by the European Central Bank (ECB) to fight the currency bloc's debt crisis. After ECB President Draghi's bold pledge last month that "the ECB is ready to do whatever it takes to preserve the euro,” even adding, “And believe me, it will be enough,” investors have been waiting for the ECB to act. Now, with Merkel's support, the market hopes the leaders will have a better chance of finding a solution to the crisis. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth.
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