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Wednesday, September 24, 2008

Is "Large-Scale" Gold Buying Coming?

According to a story in Bloomberg ...

Barrick Gold Corp. Chairman Peter Munk said bullion prices will go higher, driven by large-scale buying by "major, major'' holders of dollars who fear the effects of the U.S. government's bailout plan on the currency.
Central banks or sovereign wealth funds are among those likely to buy gold to diversify their investments and hedge against the risk of a weaker dollar, given the government's $700 billion plan to support the banking system, Munk said today.

"That impact on holders of U.S. dollars in China or Russia or Abu Dhabi or Kuwait is that they're going to say, 'What is that going to mean for the U.S. dollar, and what alternative are we going to have?' '' Munk said in an interview in New York. "So gold is going to have very powerful support.''


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