Gold is going bonkers. At present, all it knows is how to climb up. Central banks around the world seem to have caught the bug of buying gold. China wants it, India bought it, Sri Lanka bought it, Russia openly expressed interest, and probably few more. One common theme in all central bankers buying gold seems to be the desire to maintain the value of its assets. Since the continued supply of printed dollar is flooding the global markets, individual nations believe there will be reduction in value of dollar. And hence these central banks want to hold their assets in gold (rather than dollar). Few other factors that one can think of are as follows:
- Historically, gold is a perceived as safe harbor against collapsing economy, political unrest, collapsing currency, etc. And situations like US/UK sovereign debt, Dubai, Japan’s losing economy, etc does not help. This kind of environment only fuels the gold binge. Continue reading rest of this article…
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