Gold: “Monetary Collapse Insurance”
By: Ben Traynor
Monday, 10 December 2012
Why investors are turning to gold ahead of 2013…
ALTHOUGH the price of gold has fallen over the last couple of months, there has been a marked increase in demand for physical bullion.
The amount of bullion held to back gold exchange-traded funds has risen to record levels. November meantime saw the United States Mint record its best month for sales of gold American Eagle coins since July 2010.
Western gold investors clearly see good reasons to add to their positions. The Gold Investor Index tracks the buying and selling activity on BullionVault, the vast majority of whose users are in the United States, United Kingdom or Eurozone.
The Gold Investor Index rose to a six-month high in November, the fourth straight monthly increase. In total, BullionVault users added 559 kilos of gold to their bullion holdings, the second month in a row they’ve added half a tonne.
We asked a few of our users why they’ve been buying gold recently, as well as what they expect from 2013.
Among those who added to their holdings last month the principle reason given for buying gold was as part of their long-term savings strategy. Another major reason given was central bank policy.
“Central banks will carry out more quantitative easing to relieve pressure and try to stave off a serious economic setback,” one BullionVault user said, “while the economy will slowly stagnate. Expect mediocrity and stagnation (Japan-style), not disaster.”
“We are still not over the worse,” added another.