|Wednesday, 20 February 2013|
GOLD prices are yet to make a mark on this year but Mine Life senior resources analyst Gavin Wendt says gold must eventually trade higher.
The World Gold Council recently revealed that central banks bought the most gold last year since 1964, with the total up 17% for the year to 534.6 tonnes.
In his daily resource bulletin, Wendt observed it did not present the full picture of central bank buying either.
“Not surprisingly, the WGC anticipates that central bank buying will continue this year, driven by market economies and central banks,” he said.
“Importantly too, the figures quoted by the WGC report do not include any gold purchases made by China but there is ongoing speculation that China has been buying gold but not revealing it – which it has done many times in the past.”
Noting that Russia was the biggest buyer with its central bank purchasing 570t of gold over the past decade, Wendt said emerging economies lacked confidence in the established world currencies.
“And who could blame them, given the trillions of dollars that have been printed and fed into the financial system for little net effect?”
As for future economic events which might impact gold, the analyst said the fiscal cliff debate in the US was far from being resolved and would return to the fore in coming weeks.
“With the March 1 deadline looming, Senate Democrats have proposed a deal to delay the scheduled budget cuts to January 2, 2014 and replace them with $US55 billion in new revenue and $55 billion in spending cuts,” he said.
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