Bank of Korea purchases gold for first time since 1997

August 4, 2011 by · Leave a Comment
Filed under: Global News 

This article hit is right on the dot.  Any purchases of gold bullion by central banks “does” reassure gold investors that it was a wise choice in this time in uncertainty.   Yes gold does not pay a dividend but also it has no liabilities other than itself.  Unlike fiat currencies (Dollars, Euros, Francs, Yuan , etc) which carries a liability being that they are brought into existence by decisions that you have little influence on and is affect by political headwinds even though they profess monetary independence from this pressure.   If that was the case then we wouldn’t not see so much intervention every-time we have any major negative news.

Right now we are witnessing the largest expansion in public debt and currencies ever.   This is why ALL central banks (basically) are increasing their gold reserves so they can show they have something tangible in their holdings that are not entirely dependent on another counter-party (ie another government).   They can all agree on value for gold.   We are seeing the re-monetization of gold and eventually silver as we continue to increase debts at increasing rates.

Bank of Korea is smart to make this purchase and we should see more in time.

Yahoo! News – South Korea’s central bank bought 25 tonnes of gold over the past two months in its first purchase in more than a decade, saying the time was ripe to boost its gold holding, but markets barely moved on the news.

A brittle global economic recovery and precarious debt situations in the United States and Europe have boosted the safe-haven appeal of gold, lifting bullion to a series of record highs in July, as investors and central banks chased prices higher.

The central bank of Asia’s fourth-largest economy said that, with prices hovering near historic highs, gold looked less lucrative as an investment but it was the right time to buy gold because its foreign reserves had risen above $300 billion.

News of the Bank of Korea’s purchase barely moved spot gold which was steady at $1,617.89 an ounce by 2236 GMT, but analysts said it was supportive of prices. Gold hit a record high of $1,632.30 on Friday.

“Any news about central banks buying gold reassures consumers and other major players who are already looking at gold as an investment,” said Jeffrey Pritchard, analyst at California-based commodities futures and options brokerage Altavest Worldwide Trading.

The Bank of Korea said in a statement its latest gold purchase was valued at $1.24 billion. It did not say whether it had bought gold bullion or funds.

Continue Reading

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!