Central banks seen becoming net gold buyers

Submitted by cpowell on 10:48AM ET Monday, September 14, 2009. Section:

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By Frank Tang
Reuters
Monday, September 14, 2009

"What we are seeing is that central banks are making the transition from large net sellers to large net buyers," Christian said.

"You will see a net buying of 6 to 10 million ounces per year by central banks, and that is an extremely conservative projection," he said.

Christian said that European central banks appeared to be done with their gold selling, and that central banks in emerging countries which have been building up foreign reserves were now diversifying into gold due to volatility in the dollar and other major currencies.

Recently China and other emerging economies have signaled growing interest in gold rather than stockpiling their currency reserves in U.S. dollar-denominated assets.