Guess Who’s Buying Gold
|March 23rd, 2011||
|Contributed by: The Mad Hedge Fund Trader|
|With gold threatening to break out to a new all-time high, and silver having already done so, some interesting facts are coming out about the precious metals market. |
We all knew that emerging market central banks were major drivers of the price for the barbarous relic, seeking to raise reserve weightings to much higher developed economy levels. Gold also has the additional benefit in that it can be held physically in country, putting it out of the reach of American and United Nations sanction or seizure.
Libya has also been a large gold buyer, stashing as much as $6 billion worth of the yellow metal at an undisclosed underground Sahara location. Perhaps Khadafy knew that his thaw with the West would have the life of an ice cube under the desert sun, and that it was just a matter of time before there would be a grab for the country’s assets. Hey, Muammar, if this dictator thing doesn’t work out, you can always try a second career as a gold trader.
I continue to believe that gold is overbought for the short term, but has a long term target of the old inflation adjusted high of $2,300. Keep permanently on your radar the gold ETF (GLD), silver (SLV), and a major producer, Barrack Gold (ABX).