Why everybody is rushing to buy gold? Look at the latest statistics showing that the combined gold holdings of the World Gold Council, Gold Exchange Traded Funds and Barclays Gold Trust have grown to almost 1079.83 tonnes. This is a growth of 70 tonnes in two weeks. But, if all gold bullion holding funds were included, the total would be close to 1200 tonnes, as fund managers scramble for safety. A new gold rush? Perhaps, considering the instability of major currencies.
Consider the following facts: gold rose: 45% in British Pounds, 9% in Euros, 38% in Brazilian Reals and 25% in Russian Rubles. Surely, a significant growth that no gold investor, or… a speculator would ignore. China, Russia and the OPEC countries are considering substantial increases to their gold allocations in order to minimise their US dollar exposure risk; meaning, that these countries will drive gold prices even higher. Some analysts predict a rapid growth of gold bullion’s price, with Citibank going as far as predicting $2,000 an ounce during 2009. If you believe them…
The US Federal Reserve has approximately 261 million ounces of gold, according to market analysts and is unlikely to drive its ownership higher. Why? Because of the current account deficit. So, will they grab your gold and confiscate it? Highly unlikely, considering that they don’t want to be bothered by all associated constitutional issues, and the cost of storing it. So, buy gold for your investment will be safe for now, and well into the future.
