Central Banks Favour Gold
With the US dollar becoming less interesting as reserve asset, banks are looking to invest in gold. Sales of gold by European central banks is expected to be lower next year due to the conservation of gold reserves in a world hit by economic crisis. Gold is becoming the “safer choice” once more. American and European banks have been hit by the credit crisis, in which banks are no longer willing to lend each other money. Several financial institutions in Europe and the US have already been nationalized to keep them from collapse. Consumers are worried about their savings and are looking to governments for action. European and Asian markets have all opened lower today as more European banks get hit by the ongoing crisis.
Update : Germany has agreed a 50 billion-euro plan to save Hypo Real Estate. Click here to read more.
London: Sales of gold by European central banks are likely to be lower than expected over the next year as the global banking crisis boosts bullion’s appeal as a “safe” reserve asset.
And banks elsewhere in the world, most notably in Asia and the Middle East, may even become buyers of gold in an attempt to diversify their reserves away from the dollar, analysts say.
Full article here.
This post was sponsored by Cheap Wholesale Digital Cameras.