US gold hits record high $1,081.70($1091.01)/oz on IMF sale
Tue Nov 3, 2009 11:38am EST
NEW YORK, Nov 3 (Reuters) - U.S. gold futures scaled an
all-time high $1,081.70 an ounce on Tuesday, surpassing the
previous record set Oct. 14, boosted by technical buying and
news of a gold sale by the International Monetary Fund (IMF) to
Last Change Pct 2008 YTD
Chg Close % Chg
US gold GCZ9 1077.00 23.00 2.2 884.30 21.8
US silver SIZ9 16.970 0.530 3.2 11.295 50.2
Central Banks Will Become Net Buyers of Gold, WGC CEO Says
By Nicholas Larkin
Nov. 2 (Bloomberg) -- Central banks will become global net buyers of gold, the World Gold Council’s chief executive officer said today at a conference in Edinburgh.
“I believe that central banks will be net buyers over time,” Aram Shishmanian told the conference.
Last Updated: November 2, 2009 06:44 EST
Central banks lead subtle shift away from dollar
By Steven C. Johnson - Analysis
NEW YORK (Reuters) - Central banks with trillions of dollars in reserves that are already stepping up euro and yen purchases will likely continue doing so in coming years, driven by worries over the stability of the greenback.
A record U.S. budget gap and the rise of dynamic developing economies like China suggest the dollar, down over 20 percent since 2002 on a trade-weighted basis, has further to fall.
Of course, the dollar comprises some two-thirds of global reserves and will remain dominant in most holdings, as attempts to dump it would destroy the value of central bank portfolios.
But with the speed of reserve accumulation increasing after a crisis-induced lull late last year, policy makers can choose to park more new cash in euros and yen without having to sell existing dollar assets.
Posted: Mon, Nov 2 2009. 11:15 PM IST
RBI to buy 200 tonnes of IMF gold
Decision to strengthen its gold reserves follows similar moves by central banks of some other countries
Mumbai: The Reserve Bank of India, or RBI, is buying 200 tonnes of gold from the International Monetary Fund (IMF), nearly half of what the fund plans to sell.
In 1991, when India faced its worst ever balance of payment crisis, the country had to pledge 67 tonnes of gold to Union Bank of Switzerland and Bank of England to raise $605 million (Rs2,843.5 crore today) to shore up its dwindling foreign exchange reserves, which were then barely enough to buy two weeks of imports. India’s foreign exchange reserves were at $1.2 billion in January 1991 and by June, they were depleted by half. Currently, the Indian central bank’s foreign exchange reserves stand at $285.5 billion.
Stockpiling: At the current market value of $1,054 an ounce, RBI would need to spend about $7.4 billion to buy 200 tonnes of gold. Norm Betts / Bloomberg
RBI’s decision to shore up its gold reserves needs to be seen in the context of other central banks across the globe increasing their gold reserves. Among them are the central banks of China, Russia and a few countries in the European Union.
In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.