Emerging markets go for gold to protect against weak currencies
The natural buyers of today are emerging-market central banks, and over and above that, it's going to be further investment demand
Click here to add Andrey Kryuchenkov as an alert
Disable alert for Andrey Kryuchenkov,
Click here to add Bloomberg as an alert
Disable alert for Bloomberg,
Click here to add Coutts & Co. as an alert
Disable alert for Coutts & Co.,
Click here to add ETPs as an alert
Disable alert for ETPs,
Click here to add Gary Dugan as an alert
Disable alert for Gary Dugan,
Click here to add George Soros as an alert
Disable alert for George Soros,
Click here to add John Paulson as an alert
Disable alert for John Paulson,
Click here to add London as an alert
Disable alert for London,
Click here to add New York as an alert
Disable alert for New York,
Click here to add Royal Bank of Scotland Plc. as an alert
Disable alert for Royal Bank of Scotland Plc.,
Click here to add US Federal Reserve as an alert
Disable alert for US Federal Reserve,
Click here to add US Mint as an alert
Disable alert for US Mint,
Click here to add VTB Capital as an alert
Disable alert for VTB Capital,
Click here to add World Gold Council as an alert
Disable alert for World Gold Council
Gold will extend a bull run as emerging-market central banks and investors accumulate the metal to protect against weakening currencies, according to Coutts & Co., the private-banking division of Royal Bank of Scotland Plc.
"The reason we're positive on gold is that major currencies around the world lack credibility,- Gary Dugan, chief investment officer for Asia and the Middle East, said in an interview in Singapore yesterday, without giving a price forecast.
Investment holdings expanded to an all-time high this week amid concern that fresh stimulus from central banks including the US Federal Reserve will weaken currencies and may reignite inflation. Billionaire investors George Soros and John Paulson increased their stakes in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, in the second quarter.
"The natural buyers of today are emerging-market central banks, and over and above that, it's going to be further investment demand,- said Dugan. "People continue to naturally gravitate to gold.-
Gold for immediate delivery, which traded at $1,644.65 an ounce at 4:48 p.m. in Singapore, has rallied for 11 years and reached a record $1,921.15 on September 6. Holdings in ETPs including the SPDR jumped to a record 2,437.495 tonnes on Tuesday, according to data compiled by Bloomberg.
Central banks will purchase close to 500 tonnes this year after becoming net buyers in 2009, according to the producer-funded World Gold Council. Central banks added 254.2 tonnes to their holdings in the first half, according to the council, as countries from Russia to South Korea added to reserves.
Still, the global economic slowdown, driven by the debt crisis in Europe, hurt demand in the second quarter, with consumption declining 7.1 per cent, the London-based council said on August 16. Imports by India, last year's biggest buyer, slid 56 per cent to 131 tonnes in the second quarter, the council said.
Sales of American Eagle gold coins by the US Mint dropped 49 per cent to 30,500 ounces last month, the lowest level since April. The mint sold 18,000 ounces so far in August, data on its website showed on August 20.
"Do I want to go with Japan, Europe or the US, where debt to GDP is over 100 per cent?- said Dugan.
That "seems crazy because you're going to get loads of these currencies being issued to you. Unfortunately, the reserve currencies that are coming on, like the renminbi, which was a one-way bet for three or four years, has become less of a one-way bet.-
Gold was seen declining for the first time in six days in New York as a stronger dollar spurs investors to sell the metal after prices rose to a 15-week high. Platinum reached the highest in 15 weeks.
"Bullion prices are trading against the dollar,- Andrey Kryuchenkov, an analyst at VTB Capital, wrote in a report. Still, gold "looks comfortable at fresh highs even if we witness a quick retracement with small scale profit taking.- - Bloomberg News
NewsGold for December delivery was little changed at $1,642.90 an ounce by 8:13 a.m. on the Comex in New York. It reached $1,647.60 yesterday, the highest since May 4. Immediate-delivery bullion was 0.2 per cent higher at $1,640.65 in London.
- Nassib border shutdown will choke regional exports: Lebanon
- Why gold will always make for a sparkling investment
- Precious Metals Report: Fed QE programme to come under the spotlight
- Central banks won’t be able to stop printing money like in 1994 so buy gold
- Technical charts show silver price set up for a powerful rally
- Emerging market central banks monopolize gold market
- Emerging market central banks to fuel gold prices much higher
- Going cold on gold? Bullion forecasted to drop to $800 an ounce by December 2016
- US Dollar: Will the Bulls Bail Out as FOMC Leaves Rates at 2.00%, Signals Neutral Stance Going Forward?
- Emerging Markets - Singapore Retail Sales Disappoint, Remain Supported