Central Banks' First-Half Gold Buying Surpasses 2010 Tota.

[Ponce]

The world is getting ready to get rid of the "petrodollar" and deal with real money...are you also ready?
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Central Banks' First-Half Gold Buying Surpasses 2010 Tota.
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Published: Thursday, 14 Jul 2011 | 10:29 PM ET Text Size By: Reuters

The World Gold Council provided no specific figures, but the rise will be little surprise after the so-called "official sector" became net buyers of bullion last year for the first time in two decades as a means to diversify their dollar holdings, a trend that has aided a long price rally.

"It was not a sudden shift. It was a trend that was gathering in pace as Europeans were starting to sell less and emerging markets and developing nations were starting to acquire more," Juan Carlos Artigas, WGC's investment research manager, said prior to the release of its quarterly Gold Investment Digest.

Mexico has led the charge this year in ramping up its gold reserves, buying over $4 billion of bullion in early May, while the International Monetary Fund has ended a one-year effort to sell down its stocks at the end of last year.

Global central banks as a whole bought 73 tonnes of gold in 2010, according to metals research firm GFMS, which has not released figures for this year. Net official-sector sales were 34 tonnes in 2009 and 235 tonnes in 2008.

Renewed central banks' interest in gold have powered the metal's record rally in the past few years, as lingering economic uncertainties and market stimulus by policymakers increased bullion's appeal as an alternative investment.

Central banks as a group became net buyers for the first time in the second quarter of 2008. On a yearly basis, official-sector buying swung to positive in 2010, the first time in more than two decades.

"In the same way, investors look to diversify their portfolios and find a way to manage risks effectively, gold has been one of the choices with central bankers especially in developing economies to create that balance," Artigas said.

Gold's average volatility was 13.4 percent for the second quarter, well below its long-term 20-year average of 15.8 percent, according to the WGC report.

WGC is a trade group funded by gold mining companies to spur bullion demand. It also sponsors SPDR Gold Trust [GLD 155.20 0.66 (+0.43%) ], the world's largest gold-backed ETF which the group helped launch in 2004.

Artigas said that the positive trend of official-sector buying will likely continue in the near future.

"We believe that as a whole, central bank net buying is a result of the structural shift in reserve asset management," he said.

http://www.cnbc.com/id/43763980

[keehah]

"We believe that as a whole, central bank net buying is a result of the structural shift in reserve asset management," he said.
Remember the yearly hundreds of tons of government's gold selling pre-2009?
World Gold Council members: Sell low - Buy high -bill taxpayer -whipsaw economic cycles - destroy environment.

European central banks halt gold sales: World Gold Council (http://www.mining.com/2011/09/27/european-central-banks-halt-gold-sales-world-gold-council/)
MINING.com Editor | September 27, 2011

World Gold Council said European central bank sold 1.1 tonnes of gold during the year, the lowest annual sales since the Central Bank Gold Agreement began in September 1999. The current agreement permits signatories to sell 400 tonnes of gold collectively per annum.

The council said that European signatories showed a similar unwillingness to sell gold in the prior year of the agreement, selling just 7.1 tonnes of the permitted 400 tonnes ceiling.

“European central banks’ appetite for gold sales has dissipated since the onset of the financial crisis,” said Natalie Dempster, the World Gold Council’s Director of Government Affairs

“During periods of such intense economic and financial market turbulence gold adds much needed stability to a central bank’s reserves. This is also evident from the behaviour of emerging market central banks over the past two years who have accumulated significant additional volumes of gold. As a whole, central banks are now large net buyers of gold having re-evaluated their reserve asset management policies and we expect them to remain so for the foreseeable future.”

[Ponce]

They will tighten the noose around our neck very slowly.....like the frog in the pot of water.......and before you know it no more gold will be sold to the general public....................buy silver and keep your loose change handy.

People usually have a tendency to judge the present with past experiencies but what they don't realize is that the rules of the game have changed........"Don't look at what did happen, but rather at what will happen, because of what is happening".

[keehah]

Globe and Mail: Central banks go on a gold rush (http://www.theglobeandmail.com/globe-investor/central-banks-make-biggest-gold-buy-in-decades/article2239253/)
Thursday, Nov. 17, 2011

Official net purchases of gold exploded in the third quarter, totalling 148.8 tonnes, more than double the entire amount of government buying in 2010, the World Gold Council, a London-based industry association, said in new report Thursday.

The result: net gold purchases by central banks of about 350 tonnes over the first nine months of the year, compared with 76 tonnes in 2010. In 1988, the last year governments bought more gold than they sold, net purchases were 180 tonnes.

“We are seeing what now looks like unprecedented levels of central bank buying,” said Marcus Grubb, managing director, investment, at the Gold Council. “We do believe this is a long-term trend. This is not just short-term, tactical buying.”

Canada is sitting out the binge. In 1980, the country decided to sell its bullion, a stockpile of 652 tons, completing the job in 2002. Like many others, Canada decided that government paper was a better investment: cheaper to store and easier to sell. All that’s left in Ottawa’s vaults is 100,000 ounces of gold coins.

Mr. Grubb said there was a burst of official purchases in the final weeks of the third quarter, suggesting reserve managers jumped on a sudden drop in gold prices from a nominal record of more than $1,900 an ounce in early September. The metal closed at $1,722.79 (U.S.) Thursday, a 2.9 per cent tumble from Wednesday, as investors scrambled for the safety of cash amid ongoing worries about the European debt crisis.

The Gold Council didn’t name the central banks that were doing the buying