Let the hoarding begin: India buys half the IMFs gold for sale

Discussion in 'Economics' started by peilthetraveler, Nov 3, 2009.

  1. http://economictimes.indiatimes.com...ld-for-sale-whos-next/articleshow/5191921.cms

    What does it say, when countries like india and china are buying all the gold they can get their hands on?

    Remember the golden rule...(no, not treat others as you want to be treated...the other golden rule)

    "He who has the gold, makes the rules"

    If the world's medium of exchange becomes gold one day, with the amount of people and the finite amount of gold that exists, means that the value of what gold will be able to buy will be much greater than it is today.
  2. just21


    Marc Faber rates the Indian central bank as the best in the world.
  3. i don't think india or china are buying gold specifically to use in the future as a currency although they might be.

    what i think they are doing is replacing the investments they have with gold due to it being more stable.

    it may become the currency of the future but i think that the main concern is to sell dollars and get gold.

    this is more concerning because it means they are worried about the dollar and they are looking elsewhere.
  4. i think marc faber is a good macro economist and accent rules.
  5. the1


    It means the major buyers in gold have already bought and the price of gold will drop. We should be getting near a buying climax. Watch volume explode upward over the next few days. A good trading opportunity, imo.
  6. good comment. i think you are right about the price rising in the couple of days. then falling again. however i disagree it will be the peak. i think when the dollar declines further or the economic situation gets worse namely when the fiscal stimulus ends it will create a need for an inflation busting investment. so i agree in terms of the end of central bank purchase on mass but investors i disagree. although i think you are correct about the price over the next few days.
  7. Gold is up almost 20% in the last 2 months. Hardly what i would call "stable" Obviously they want gold for some reason.

    Before this purchase, India had 557 tonnes of gold reserves. This means they increased their reserves by 40%. That is quite a bit to increase your reserves by and for what purpose? Its very unusual to make this kind of purchase in my opinion....but that said, i think the above guy is right. I think gold will go down a bit from here at least temporarily before climbing again.
  8. perhaps you are right but i still think the fear of the dollar has something to do with it. either way it is a good thing for us.
  9. RBI is good and Y. V. Reddy, even though he's no longer in charge, is the man (doesn't surprise me, given the selection process for senior public servants in India).

    RBI, just like the PBOC (which was initially rumored to be the buyer of the IMF gold), is simply seeking to diversify its reserves. It's not even just a question of ccy diversification (the CBs already allocate heavily into govt debt denominated in a variety of ccies). It's a question of diversifying their holdings so that they don't have to rely exclusively on paper assets. Same reason why SWFs have been buying arable land and other tangible resources.

    In somewhat similar news, Russia's Gokhran has sold 40 tons of their gold to the Bank of Russia.

    In my view, today's move in gold might have been caused by the expectation that, now that they have been undercut by the RBI, the PBOC is not going to be able to find anyone to offer them the amounts they need (and these amounts are not small, given the size of their reserves).
  10. maybe I am misinformed on the subject but india's CB is not that high on the invite list in Basel.

    do you really think these guys are going to be buying at the bottom or at the top?

    just a contrary opinion.
    #10     Nov 3, 2009