India & China: hoarding gold and shunning dollars
Nov 9th, 2009 | By Byron King | Category: Featured, Financial News, Gold MarketByron King, Whiskey and Gunpowder
Let’s review the big picture for gold. What’s going on? And what are people saying?
For much of 2009, gold traded in the range of low-mid $900 per ounce. There was a dip over the summer, with a strong upswing starting in September. Gold is now trading well over $1,000 per ounce, in fact just under $1,100.
Turns out that the government of India was buying gold in mid-October. Over a two-week span, the central bank of India bought 200 tonnes (metric tons) of gold from the International Monetary Fund (IMF) at an average price of $1,045. The IMF — over which the U.S. holds veto power for most actions — got approval to sell the gold from — where else? — the U.S. Congress, last spring.
Previously, the government of India held 350 tonnes of gold reserves. This 200-tonne purchase is a 57% increase in India’s reserves. There’s joy in India, I’ll bet. (It makes me wonder what the Pakistanis think, now that their large neighbor has both nuclear weapons AND a growing gold hoard.)
To read the rest of the story and learn more about China’s golden ambitions, click here.
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Byron is now a contributing editor to Energy and Oil, Whiskey & Gunpowder and editor of Outstanding Investments. After Harvard, Byron has followed developments in the oil and gas industry for more than three decades.