Gold Bullion Buyers
The IMF (International Monetary Foundation) still has 191.3 tonnes of gold bullion for sale, and is still waiting for formidable gold bullion buyers. The remaining gold equates to about 5% of the annual global demand for the metal, and many have wrongfully anticipated that China would buy up at least a large portion of that sum. Those assumptions were apparently closer to wishful thinking, as China has opted in recent years to also purchase gold from her own domestic producers, rather than from the IMF. By doing so, China has managed to almost double her gold reserves over the past six years, and currently holds 1,054 tonnes of bullion.
The immediate shortage of IMF gold bullion buyers has reflected in a 0.3% increase for the U.S. dollar on the Index today, bringing it up to 80.75. Experts believe that if China bought IMF bullion now, it would reflect negatively on dollar values, which is why despite enjoying a thriving economy, China won’t likely be one of the IMF’s needed gold bullion buyers, since she already owns so much U.S. debt.
Gold investors are eagerly awaiting this Thursday’s testimony by Federal Reserve Chairman, Ben Bernanke before Congress. Bernanke will be speaking about our government’s monetary policies, which could likely act as a strong influence on both gold spot prices, and dollar values. The gold spot price moves oppositely to dollar values, and many anticipate the Fed’s announcement to finally begin raising interest rates. Higher rates historically mean lower dollar values, which bullion investors hope will equate to a rising gold spot price.
Jonathan Monroe
