Banks around the World still buying Gold

The Central Bank of Mexico has just completed a purchase of $4.6 billion worth of gold. With the recent record setting value of gold at over $1400 an ounce (http://cash4gold.blogspot.com/2011/04/gold-value-record-high.html )it only makes sense that worldwide banks are still interested in the purchase of pure gold to back up their currency investments. The Mexico purchase involved the acquisition of 93.3 tons of gold, which turns out to be around 3.5% of all the gold mined in an entire year.

Mexico isn’t the only country jumping on the record breaking wave of gold that’s flooding the world. Russia and Thailand have also added new gold to their bank reserves. Russia purchased 18.8 tons of gold in march, while Thailand purchased 9.3 tons. By purchasing gold, central banks around the world are securing their reserves in light of economic downturns. Because gold continues to rise in value, their assets are secured with purchases of gold for bank reserves.

From Buisness week:

““Central banks have good reason to buy gold,” said Peter Morici, a professor of business at the University of Maryland in College Park and a former economic adviser to the U.S. government. “...Treasuries are not a sound investment” and budget and debt issues mean central banks should buy gold, he said.”

In total, the 3 countries have purchased about $6 billion in gold for their bank reserves.

Visit Business Week for more info: http://www.businessweek.com/news/2011-05-04/central-banks-expand-gold-reserves-with-6-billion-purchase.html