Market Chatter: Gold Drop Splits Central Banks as Sri Lanka Sees Opportunity

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"The biggest drop in gold prices since 1983 has divided central banks on whether the metal is cheap enough to increase investment," Bloomberg reported.

It said: "Sri Lanka's central bank governor said falling prices are an opportunity for nations to raise gold reserves and that the island will "favorably" examine buying more. The Bank of Korea said the plunge isn't a "big concern" because holding the metal is part of a long-term strategy for diversifying currency reserves. Reserve Bank of Australia's assistant governor said bullion has no "intrinsic value." South Africa's central bank governor won't adjust its reserves policy."

"Central banks own about 19% of all gold ever mined, and last year boosted their holdings by the most since 1964, according to the London-based World Gold Council. The metal, which rallied for the past 12 years in the longest gain in at least nine decades, has lost 28% since climbing to a record $1,921.15 an ounce in September 2011."


"Gold for immediate delivery fell to $1,321.95 today, the lowest since January 2011, and was up 2.5% at $1,381.30 by 3:04 p.m. in London, cutting its slide this year to 18%. That would be the biggest annual decline since 1997. Prices slumped 14% in the two days through yesterday, the most since February 1983."



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This article appears in: Investing , Commodities

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