Central Banks to be Net Gold Buyers This Year - Blackrock
Source: Reuters, James Regan (11/16/09)
Central banks will be net buyers of gold this year as they diversify away from the U.S. dollar, global commodities investment fund, according to fund manager BlackRock. Such an occurrence would mark the first time in two decades that central banks have bought more gold than they sold.
BlackRock is one of the world's largest fund managers, boasting a total $1.4 trillion under management across all asset classes. It is manager and adviser to the U.S. Federal Reserve and its views can influence the direction of global markets.
Evy Hambro, who runs two of the world's largest commodities funds, BlackRock World Mining Fund and Gold & General Fund, gave an upbeat outlook for gold during a media briefing in Australia.
His forecast for net central-bank purchases of gold this year would, if met, mark the first year in two decades when the world's central banks bought more gold than they sold. They have been net sellers of gold each year since 1988.
"The most recent break-out in the gold price in U.S. dollars has caused most gold prices to start trending higher at the same time," Hambro said, adding that investors were now looking for gold to rise in other commodities as well as U.S. dollars.
"When you start to see the price rising in a range of different currencies, it is a clear sign of a very strong market to come," he added. . . Hambro said investors were now "looking for price rises across all currencies" as central banks build up their gold holdings and global supplies tapered off.
"Gold's role is gathering a lot more attention in terms of risk diversification," he said.