Gold Reaches All Time High on Central Bank Buying Speculation

There is speculation that Central Banks around the world will continue to buy bullion. This comes after the Russian Central Bank announced recent gold purchases. The IMF continues with its plan to fund various stimulus programs worldwide with the sale of its gold reserves.

Futures reached an all-time high of $1,174 an ounce yesterday as the U.S. Dollar Index dropped the most in two weeks and Russia’s central bank said it bought more bullion last month. The International Monetary Fund said it was trying to complete a planned sale of gold as soon as possible. The world’s biggest gold-backed exchange-traded fund yesterday rose to the highest level in almost five months.

via Bloomberg

The accumulation of the metal by Central Banks has created a trend that is now being followed by other types of investors and some analysts expect a pullback, although they don’t see an immediate change in the direction of the price of gold.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza