Gold continues to ease down over the last two days as the US dollar finds its feet again. Gold is down $1.80 at 1243.70 pulling silver along with it to
Before the release of US data on Wednesday gold was trading near its highest level since early September on Wednesday, supported by concerns over slower economic growth in China, although expectations Asian physical demand may slacken kept gains in check. Worries over the fate of the global economy heightened this week after China said third-quarter growth was the slowest since 2009, lifting appetite for safe-haven assets such as gold.
A well-known said there is another factor supporting the argument of rebounding price. Chinese central bank is silently amassing gold in the last few years by diluting its investment in US securities in over $3.5 trillion reserves. Other central banks are also doing the same by getting rid of their reserves in dollar and euro-denominated securities. “It is worth noting that central banks were net sellers of gold in the market till 2009; but this trend changed in 2010 and now they are active buyers,” reports showed. “Keeping in view the gold production cost, even a strengthened dollar may not have any negative impact on gold prices.”
Reports from the World Gold Council, the world currently has somewhere between 120,000 and 140,000tns of gold ‘above ground’. Another 57,000tns are recoverable from the existing mines. “Divided amongst the population of the world is about 23 grams per person.” US gold reserve is just over 8,000tns, which at current rates are worth around 2.3 percent of the US national debt. “This clearly shows the gold reserves have no relevance to sovereign debt,”