Gold News

Central banks 'favoring Gold Investment over paper currencies'

A prominent official at ETF Securities claimed yesterday (November 19th) that the value of making a Gold Investment is being underlined by the ever-increasing rate of central-bank buying at present, Reuters reports.

The Reserve Bank of India announced recently that it is set to purchase 200 tonnes of the yellow metal from the International Monetary Fund amid the US dollar's current struggles.

Nigel Phelan, the Australia and New Zealand director at the futures firm, has explained that other banks will follow suit as fears persist over the future of the greenback, which shares an inverse relationship with gold.

"Many market participants view this purchase as just the tip of the iceberg, with China, Russia and other central banks also indicating their intention to build up gold holdings as part of their strategy to diversify away from the US dollar," he told the news provider.

"Gold is being viewed as one of the primary alternatives to holding paper currency and the Gold Price has become a key barometer of investor confidence in government policies."

Last week, Wolfgang Wrzesniok-Rossbach, head of marketing and sales at German firm Heraeus Metallhandels GmbH, added his voice to the growing list of observers backing gold for further gains.

Speaking to Bloomberg, he also referred to the travails of the US currency, explaining that investors are now looking to shift their money into physical gold for its safe-haven qualities.

"There will always be a focus on the dollar. There's still a lot of interest for physical gold. There's now a tendency to buy on dips," he told the news provider.

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