Mauritius Buys 2 Ton of IMF GoldSubmitted by GCG3 on Tue, 11/17/2009 - 13:42
Mauritius Buys IMF Gold, Follows India as Metal Soars (Update4)
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By Sandrine Rastello and Kim Kyoungwha
Nov. 17 (Bloomberg) -- Mauritius bought 2 metric tons of gold from the International Monetary Fund, underscoring a drive by central banks to boost holdings as the precious metal trades near a record and the dollar slumps.
The $71.7 million sale to the Bank of Mauritius was based on market prices on Nov. 11, the IMF said in an e-mailed statement yesterday. The Reserve Bank of India paid $6.7 billion for 200 tons from the IMF, according to a Nov. 2 statement.
Gold has surged this year as the U.S. currency declines and investors seek to protect their wealth. Emerging-market nations, which have amassed stockpiles of foreign-currency reserves since the 1998 financial crisis, have shown increased interest in diversifying out of U.S. assets.
“Investors at different levels feel more comfortable” with some gold in their portfolio, said Albert Cheng, Far East managing director at the World Gold Council.
The purchase more than doubles the amount of gold held by the Mauritian central bank to 5.69 percent of its total foreign exchange reserves, from 2.34 percent at the end of October, the bank said in an e-mailed statement today. The acquisition partially reverses a decline from the 13 percent of reserves that gold accounted for on Dec. 31, 1979.
Gold for immediate delivery is headed for a ninth annual gain and touched an all-time high of $1,143.60 an ounce yesterday. The metal, which traded at $1,134.32 at 9:46 a.m. in London, is the “ultimate currency,” Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York, said yesterday.
The Mauritian purchase is “another signal that emerging- market central banks are looking to increase their foreign- exchange allocation in gold,” Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., said from Sydney.
The Dollar Index, a six-currency gauge of the dollar’s value, was little changed today near a 15-month low. The Federal Reserve has cut borrowing costs to an all-time low while the U.S. government boosted spending to combat recession in the world’s top economy, fueling speculation the currency will be debased.