Central bank backing gives gold 'safe-haven glow' - Wednesday 5th December 2007

Gold's value as a safe haven investment could be greater than ever, bullion experts have claimed.

Gold Investments said that the precious metal held huge value as central banks continued to hoard it as an exchange guarantee, with new commercial demand from Asia fuelling the present positive cycle.

The United States central bank was identified as the biggest holder of gold in the world, with its 8,500 tons representing some 70 per cent of the US currency reserves – adding value to the metal and encouraging others to buy gold.

Mark O'Byrne, director of Gold Investments, said: "Gold is the classic safe haven investment. That is why every central bank in the world still has tons and tons of gold."

Commenting on the recent upsurge in gold prices, he said that current cycle could extend on, explaining: "People believe that gold is actually stronger than it was in the sixties and seventies because there was not a global economy and you had huge protectionism."

While America is the biggest national holder of gold bullion, Russia was recently reported to be raising its gold portfolio with significant purchases of the metal.
Goldbug, 05 Dec '07

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