Shengtai Group – More Central Banks Acquire Gold
The International Monetary Fund’s monthly report on central bank reserves showing Russia and Korea as adding to their holdings of gold during June and July, confirms the trend established since the financial crisis of 2007/08 for central banks to be net buyers rather than net sellers of the precious metal says Asia-based broker dealer, Shengtai Group.
“Shengtai Group” says it expects gold to surpass $1800.00 per ounce before the end of 2011. “It could go far higher if the US Federal Reserve decides to restart its quantitative easing program.
At the moment, gold’s $1660.00 price tag owes as much to expectations of further QE as it does to investor fear over the European debt crisis and we think that if the US jobs picture deteriorates, the Fed will, indeed, step in.” said one of the firm’s metals analysts.
The central bank gold purchases are being explained as a means for those countries to diversify some of their foreign currency reserves away from the US dollar which is increasingly being seen as incapable of acting as a store of value.
“Shengtai Group” is advising its clients to refrain from trading in and out of gold warning that the suddenness with which the price can reverse direction makes it excessively risky for all but the most experienced traders.
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