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Thursday, August 4, 2011

Western Quagmire sets the Gold on Fire

Central banks over the world are fast losing faith in European and US treasury products and currencies and are gradually changing their focus towards Gold and ended up with buying 180 tons of gold in this calendar year.
What is interesting is, this quantity is more the double what central banks bought globally in CY 10.
Country
Gold purchased
Mexico
98 ton
Russia
48 ton
South Korea
25 ton


Buying gold was a move to diversify the currency reserve.
USA successfully managed to raise its debt ceiling at least by $ 2.1 trillion, despite this long term prospects of US economy are bleak and fed may come out with QE3 (Quantitative Easing 3) which is like a temporary breather only.
Europe too is passing through the debt crisis, and investors are diverting their assets to safe havens like gold and this gold-rush resulted in gold prices appreciating by 12% in last 30 days.

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