“Gold Is A Physical Safe Asset” Says Central Bank of Korea
Wednesday, 5 December 2012
Important on the horizon is the Fed meeting next week December 11 and 12th, the latter including a summary of economic projections and a press conference by the Chairman. In the minutes released after the last meeting, the US Fed layout a threshold strategy where the Fed would maintain near zero interest rates based on an economic variable such as employment rates at 7.5%.
The crux of the issue FOMC members is deciding whether that variable should be given with numeric or verbal guidance. Since, Operation Twist is expiring at the end of the year; information is necessary as to when it will be replaced with QE4.
The Bank of Korea increased gold reserves 20% last month to diversify investments, boosting holdings for the fourth time since June 2011 and underscoring increased demand by central banks according to Bloomberg.
The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2% of total reserves, the bank said.
“Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said.
The Bank of Korea bought 16 tons in July, 15 tons in November 2011 a further 25 tons over a one-month period from June to July last year.