Euro Crisis: Central Banks Bullish on Buying Gold

CENTRAL BANKS say they see Buying Gold and emerging-market debt as preferred asset classes in 2012, spurred by worsening fears over the Eurozone crisis according to a new survey from Swiss investment bank UBS.

The bank last week surveyed more than 80 central bank, sovereign wealth fund and other governmental reserve managers with over $8,000 billion in assets between them during the 18th Annual UBS Reserve Management Seminar for Sovereign Institutions.

Three quarters of attendees said that at least one country would leave the Euro currency system by 2017. A quarter of those forecast a drop out of the Eurozone by more than one country.

In contrast, over 20% of central-bank reserve managers are bullish on Buying Gold, predicting that it would be the "best performing asset class" this year, alongside emerging-market government bonds.

Central banks as a group bought 455 tonnes of Gold Bullion last year, and have continued Buying Gold in 2012. This month the National Bank of Kazakhstan said it plans to increase its gold reserves by 25 tonnes this year.

The central banks' view on the Euro crisis matches what private gold investors think, according to a recent poll from market-development organization the World Gold Council, cited by professional investors' website Investment Europe. Three quarters of gold investors predict the departure of Greece from the Eurozone.

Less than half of respondents to the WGC survey believe that European wealth assets will grow – in real terms – between now and 2020.

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