Daily News

February 26, 2010 – Bolstered by central bank purchases and other large investors, gold investment appears to have found a bottom for its recent price correction, putting it in a position to experience gains going forward. These moves are seen to be an attempt to hedge or protect assets against falling values of national currencies.

Central banks in a number of countries have been linked to efforts to purchase more gold. Robert Lenzner of Forbes.com states, “In recent weeks there have been rumors that other global central banks are considering major commitments to gold and gold mining shares as a way of protecting against expected weakness in the dollar.” This opinion was supported when India purchased 200 tons from the IMF last year, and Sri Lanka and Mauritius combines to purchase an additional 12 tons.

China is considered a strong candidate for additional gold investment in order to diversify its nearly $2.2 trillion in foreign exchange reserves. The country is said to be especially anxious concerning declining values in its dollar-based securities, including Treasury notes and bonds. The Chinese have recently sold US securities, leaving Japan as the largest sovereign lender to the US.

Large private lenders have been active in gold as well. Lenzner states, “Recently, billionaire investor George Soros disclosed he had more than doubled his position in gold bullion, making him one of the largest hedge fund holders of gold along with John Paulson and others.”

With the world’s central banks and some of its most successful traders moving into larger gold positions, it looks like gold investment is still strongly progressing. Bolstered by these large investors, gold appears primed to be a very successful investment for traders of all sizes both now and in the future. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - Gold-Investment.info