Gold Hits All Time High As US Dollar Continues to Drop; Central Banks Buying Gold
Posted on | November 16, 2009 | No Comments
This morning we have seen gold reach new all time high levels around $1,130 an ounce. As gold and other commodities continue to rise the fall of the US dollar continues. The US dollar index dropped below 75 early this morning in trading. To make an even more bullish stance on gold, BlackRock stated that they feel that central banks will be net buyers of gold this year as they want to get away from the US dollar.
The investment in the shiny commodity has already increased late in 2009. India recently purchased 200 tons from the International Monetary Fund. Taiwan, China and South Korea are all do research to determine if they should raise the amount of gold in their reserves. Evy Hambro of BlackRock forecasts that we could see the first year of more gold bought than sold by central banks since 1988.
The breakout above the $1000 level for gold was very significant. The psychological ceiling served as resistance for several years but now we could see several opportunities to reach all time highs. As gold climbs higher the dollar continues its freefall. The US Dollar has lost 7.5% of its value as gold has surged over 30% higher. As stated on Subprime Blogger many times, the commodities and gold bull market still has legs and should run for several more years.
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Author: Alan Lake
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