Asian CBs Will Be Key Driver to Gold's Rise
Source: Kitco, Daniela Cambone (8/20/10)
"Asian CBs switched from selling to buying on fears over Western currency debasement."
Government distrust and concerns over the US dollar will lead Asian central banks to become key buyers, said Saxena in an exclusive interview with Kitco News. China and India specifically will pile into gold, he said.
"If you look at what has happened in the last 20–30 years, the Chinese and Indians have had a very tough time and now they are becoming wealthy. One thing they have learned over the years is not to trust any government, especially their own," said Saxena.
For the first time in many years the public sector or government sector has now become a net buyer of gold and this is very positive for gold.
Saxena said that even though central banks in the developed world are still selling their gold, which he says is, "a mistake," Asian, Middle Eastern and Latin American central banks will be buying the metal. "For many years, central banks were sellers of gold," said Saxena. "The net result is that the public sector is a net buyer, and I think this is going to push prices even more," he said.
Asian Central banks switched from selling to buying on the fear that Western countries are debasing their currencies.
Overtime, Saxena is positive China will surpass India as largest consumer of gold in the world.
"If you look at the consumption power in China it is vastly greater than that of India, simply because their GDP per capita is a lot higher," he said.