The dire state of the global economy has been pushing the price of Gold to all time highs. 100 ounces of Gold is trading well above $1600 and looks set to continue it up rise. Goldman Sachs analyst predicted gold to reach $1690 per ounce in 2011 and the price will continue to rise in 2012 reaching $1750.
Gold reserves in South Korea have been significantly bolstered of late as the emerging economy increasingly turns its attention to bullion.
The Bank of Korea – established in 1950 – revealed it has bought 25 tonnes of gold, helping the country almost triple its reserves of the precious metal over the past two months.
Such purchases were worth around $1.24 billion and were the first of the kind by the institution since 1997-1998, when the Asian financial crisis struck.
South Korea is the latest emerging market nation to set its focus on gold acquisitions, as the economies move away from the struggling dollar and aim to diversify their reserves.
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Thailand, Mexico, India, China and Russia have all bought substantial amounts of bullion in the past few years.
Ross Norman of retail precious metals broker Sharps Pixley stated: “The switch into gold by central banks is very much a reversal of the policy a decade ago.”
Central banks have been stocking up on the precious metals post Lehman crisis. India’s Reserve bank purchased 200 tonnes from the IMF back in 2009 followed by 10 tonnes by Sri Lanka.
As volatility and uncertainty continues in major economies and the continued decline in the dollar world economies will be poised to ensure they have enough stock piles.
Traders are asking how far up? Citibank predicted bullion reaching $2000 in 2009, they may have been slightly wrong with the date but they may have got the price right!