Central Banks To Be Net Buyers of GoldSubmitted by bobbyw24 on Mon, 11/16/2009 - 08:10
BlackRock: Central Banks To Be Net Buyers of Gold
Central banks will be net buyers of gold this year as they diversify away from the U.S. dollar, marking a reversal of a decades-old trend, global commodities investment fund BlackRock said on Monday in comments that helped drive bullion to fresh record highs.
Investment in gold by central banks has picked up recently, with India buying 200 tons from the International Monetary Fund, and Taiwan's central bank is studying whether to raise the amount of gold in its forex reserves, with China and South Korea also debating the issue.
BlackRock [BLK 233.10 1.85 (+0.8%) ] is one of the world's largest fund managers, boasting a total $1.4 trillion under management across all asset classes. It is manager and adviser to the U.S. Federal Reserve and its views can influence the direction of global markets.
Evy Hambro, who runs two of the world's largest commodities funds, BlackRock World Mining Fund and Gold & General Fund, gave an upbeat outlook for gold during a media briefing in Australia.
His forecast for net central-bank purchases of gold this year would, if met, mark the first year in two decades when the world's central banks bought more gold than they sold. They have been net sellers each year since 1988.
Gold stored in central banks worldwide has dropped more than one-sixth since 1989.
"The most recent break-out in the gold price in U.S. dollars has caused most gold prices to start trending higher at the same time," Hambro said, adding that investors were now looking for gold to rise in other commodities as well as U.S. dollars.
"When you start to see the price rising in a range of different currencies, it is a clear sign of a very strong market to come," he added.
Spot gold [US@GC.1 1129.0 12.30 (+1.1%)] stood