Central Banks to be Largest Purchasers of Gold, Blackrock (BLK) Says
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An article from Reuters today reported that Blackrock (NYSE: BLK) said that Central Banks will be the net buyers of gold as they try to diversify away from the U.S. dollar.
India's Central Bank recently bought 200 metric tons from the International Monetary Fund. China, Taiwan, and South Korea are debating whether or not to raise the amount of gold in their forex reserves.
Fund manager Evy Hambro (who runs the Blackrock World Mining Fund and Gold & General Fund) was upbeat about gold during a media briefing in Australia. He forecasts that this year will mark the first in about 20 years that Central Banks are purchasing more gold than they are selling. In 1999, selling gold by the banks was so common, that big European banks made a pact to cap selling at 400 metric tons per year, in order to keep the price from collapsing.
The U.S. dollar has dropped in price about 7.5% against major world currency indexes, versus a gain of about 33% in the value of gold.
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