Saudi Arabia buys $3.5bn of gold in two weeks

[seemslikeadream]

http://arabianmoney.net/

There has been an unprecedented surge in Saudi gold purchases in the past two weeks with over $3.5 billion being spent on the yellow metal, reported Gulf News citing local industry sources.

Gold market expert Sami Al Mohna told the leading regional newspaper that this buying had substantially increased the gold reserves of the country: ‘Many Saudi investors see this as the right time for making investments in gold as the price is the most reasonable one at present’.

He said gold was seen as a traditional safe haven at a time of global financial turmoil. Gulf regional stock markets have fallen very sharply since early October, leading to an exodus of cash which needs to find a safe haven.

Gold is currently trading at prices similar to a year ago, and 30 per cent off its March peak. Saudi investors clearly think this is the right time to buy and are piling into gold.

News about the Saudi gold rush is bound to fuel speculation about the alleged large physical gold transactions that have been taking place at prices will above the spot price set in the futures market. It is very unlikely that such a large hoard of physical gold could have been bought for the depressed current price.

Market analysts such as the legendary gold bug Jim Sinclair have pointed out that if less than two thousand millionaires insisted on delivery of physical gold at the end of their futures contracts, as is their legal right, then the spot gold market would jump to new highs.

[ensho]

1. important news - thanks

nt

[seemslikeadream]

3. Don't forget China

http://jessescrossroadscafe.blogspot.com/2008/11/china-to-shift-reserves-into.html

China Expected to Shift Reserves into Commodities and Gold


"Beijing's reserves could easily go up to 3,000 to 4,000 tonnes..."


The Standard - Hong Kong
Gold rush
By Benjamin Scent
Friday, November 14, 2008

The mainland is seriously considering a plan to diversify more of its massive foreign-exchange reserves into gold, a person familiar with the situation told The Standard.

Beijing is considering changing its asset allocations during the financial tsunami in order to build up gold reserves "in a big way," the source said.

China's fears about the long-term viability of parking most of its reserves in US government bonds were triggered by Treasury Secretary Henry Paulson's US$700 billion (HK$5.46 trillion) bailout plan, which may make the US budget deficit balloon to well over US$1 trillion this fiscal year.

The US government will fund the bailout by printing new money or issuing huge amounts of new debt, either of which will put severe pressure on the value of the greenback and on government bond yields. (Is it odd that almost everyone in the world EXCEPT Americans can see this coming? - Jesse)

The United States holds 8,133.5 tonnes of gold reserves valued at US$188.23 billion. China holds gold reserves of just 600 tonnes, worth only US$13.89 billion.

Beijing's reserves could easily go up to 3,000 to 4,000 tonnes, Tanrich Futures senior vice president Colleen Chow Yin-shan said.

[tuckessee]

2. Fools!

They should be buying GM stock and hoarding FRN's.

:sarcasm:

[aquart]

4. Do the Saudis believe the United States is going to default?

That we won't be able to back any of our notes? Some of them?

[DireStrike]

5. The G-20’s Secret Debt Solution

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4461282

Hate to link to a link but eh.

Would be... I don't think there's a word strong enough for it.

[deminks]

6. But, But, they gave some back to George yesterday

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4457136&mesg_id=4457136