Central banks are to expand their gold reserves for the first time in two decades, it is estimated.
By Daniel at 17 December, 2009, 9:49 am
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Bloomberg News reports that researchers CPM Group think that the banks, which currently hold approximately 18 per cent of all gold ever mined, will make the first net expansion since 1988 in response to the record price of the precious metal.
Investors are also adding to their reserves to rival those of the big banks, while India, China and Russia have also expanded the amount of gold that they own.
Peter Morici, a professor of business at the University of Maryland and former economic adviser to the US government, says: “What it reflects is a lack of confidence in the US economy and the long-term durability of the dollar as a store of value.”
Earlier in the year, India bought 200 metric tonnes of gold from the International Monetary Fund, a figure which is equivalent to eight per cent of the annual world mine production.
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