26
February
China May Buy More Gold; $1,100 An Ounce Appears To Be Support Level
26 February 2010 Forbes
A report that China's central bank will buy another $7 billion of gold bullion from the IMF, which has been periodically raising funds by the sale of its precious metals reserves, has been touted as helping to put a floor under the price of gold at around $1,100 an ounce Wednesday.
Several days ago, billionaire investor George Soros disclosed he had more than doubled his position in gold bullion, making him one of the largest hedge fund holders of gold along with John Paulson and others.The IMF sold roughly the same amount to India last year. The tiny island nation of Mauritius and Sri Lanka also added gold to their reserves.
This is part of a continuing trend in which central banks have increased their gold reserves as a way of hedging or protecting against the fall in value of their holdings of paper money like the dollar and the euro. China, with $2.2 trillion in foreign exchange reserves, the most of any nation, is known to be anxious about the value of its dollar-denominated securities, such as Treasury notes and bonds. In recent weeks, China has sold US securities, making Japan the largest sovereign lender to the U.S.
