Thursday, November 05, 2009
CHINA CONFIDENTAIL
On India's Dollar Dumping, Gold Buying
Stuart Burns writes:There has been a lot of discussion over the last year about central banks and sovereign wealth funds concerns over US dollar weakness, the possible rise in inflation and in the longer term, the US dollar losing its status as the world’s reserve currency. So far it has been mostly that, discussion. But in what is arguably the first and most public move by a central bank to diversify its foreign exchange reserves, India purchased 200 metric tons of gold from the IMF last month. The Reserve Bank of India (RBI) bought the gold between Oct. 19 and 30, an IMF statement is reported to have said in the Wall Street Journal. The $6.7 billion in proceeds from the sale indicate an average price of $1,045 a troy ounce. If so the RBI is up $250m on their investment as gold has continued to rise.
That isn’t how the RBI is looking at it of course. This isn’t a short term punt; by their own statements it is a diversification to avoid anticipated devaluation in the dollar. Sonal Varma, an economist at Nomura Financial Advisory & Securities in Mumbai, is quoted as saying “(The) Dollar will continue to be a significant part of foreign-exchange holdings, as most of India’s external debt is in dollars. The gold buying, as of now, seems just an asset-diversification strategy.”
Continue here.
Gold seems to be steadying at around $1,100 an ounce on a slightly firmer dollar. But the precious metal will break through $1,400--the next milestone--and make it all the way to $2,000 an ounce before the end of next year, according to China Confidential analysts.Wednesday, November 04, 2009
Hamas Missile Can Hit Tel Aviv
Thursday 5 November 2009
Nuclear-arming, Islamonazi Iran has supplied its Sunni Palestinian proxy with a missile that can hit Tel Aviv. Click here for the story.
Posts
