Monday, December 7, 2009

Worried About A Gold Price Correction?

The story pasted from tonight's Midas report at might help you sleep this week - it's from "Commodity Online."  I'll have more to say about the technical and fundamental condition of the gold market either later tonight or tomorrow, but for now I will say that the big eastern hemisphere central banks are still buying aggressively:

Russia’s central bank eyes more gold

MOSCOW (Commodity Online): Russia’s Central Bank picked up the pace of gold purchases in November, diversifying reserves as a weaker dollar boosts the appeal of bullion. And, it has announced that Russia may buy more gold in the coming days.

Russia’s gold reserve probably rose by $790 million to $23.1 billion in the week ended November 27. The Central Bank increased gold holdings by almost 130 tonnes in the last year. The bank’s holdings equaled $23 billion on December 1, a gain of 13 per cent in the month.

Russia plans to increase gold holdings and diversify the structure of its reserves, seeking alternatives to a weakening dollar.

That development worries some people: Since central banks typically buy US dollars to store their foreign exchange reserves, the growing taste for gold can be seen as the latest sign that the greenback’s status as the world’s sole reserve currency is in jeopardy.

Also, make sure you read this brief and brilliant update on the dollar, euro and gold from James Turk:

The Ascent of Gold/Debasement of the Dollar