Michael Lombardi: In these pages, I have written extensively on how central banks will ultimately be the ones who drive gold bullion prices much higher. The phenomena of these banks getting back into gold (after they were net sellers for years) started in mid-2009.
The chart below clearly shows the rise in gold bullion reserves held by central banks across the global economy; its trend is quite impressive, even for a gold bug like me.
Central banks’ gold reserves have increased about 6.4% since the first quarter of 2008 to the first quarter of 2013. (Source: World Gold Council, last accessed September 6, 2013.) While on the surface that sounds like a small number, the actual increase is 1,717 tonnes of gold—equal to about 64% of the total amount of gold produced annually.
And the buying continues. In the second quarter of this year, central banks bought more gold. They purchased 71 tonnes of the yellow metal. (Source: World Gold Council, August 15, 2013.)
Why are these banks running towards gold bullion? It’s because they are getting out of U.S. dollars as their reserve currency. The chart below tells that story.(...)Click here to continue reading the original ETFDailyNews.com article: The Rise In Gold Bullion Reserves Held By World Central Banks Is ImpressiveYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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