Central banks pounce on falling gold, buying it through BIS

Submitted by cpowell on Sat, 2012-03-17 15:17. Section: Daily Dispatches

By Jack Farchy
Financial Times, London
Friday, March 16, 2012

Gold prices this week fell to their lowest since mid-January after the Fed struck an optimistic tone on the US economic recovery. "It's clear that the market trend right now is an unwinding of safe-haven exposures, like gold, and a preference for growth assets," said Edel Tully, precious metals strategist at UBS.

Buying from large physical consumers of gold such as China and India remains sparse, despite the fall in prices. India on Friday announced it would double import tariffs for gold, a move analysts said could damp demand.

"Asian physical demand remains lacklustre," Credit Suisse said, arguing that gold prices could fall below $1,600. "Gold has now slipped back toward the middle of its long-term trend and has room to drop further."