BS: India buys gold as dollar drop fuels diversification
LONDON — India, the world’s biggest gold consumer, bought 200 tons from the International Monetary Fund (IMF) for 6,7bn last month as central banks show increased interest in diversifying their holdings to protect against a slumping dollar.
The transaction, equivalent to 8% of world annual mine output, was the IMF’s first such sale in nine years and propels India to the ninth-biggest government owner globally, according to figures from London- based research company GFMS. India previously held 358 tons.
The news was a “surprise because everybody was talking about China being the buyer”, TheBullionDesk.com’s James Moore said.
“The fall in the US dollar seems to be pushing all the central banks to strengthen their portfolio with gold,” said NR Bhanumurthy, professor at the National Institute of Public Finance and Policy in New Delhi. “Gold is a safe store of value.”
Gold for immediate delivery was little changed at 1059,72/oz in the afternoon in Singapore and was about 11 below its record 1070,80/oz of October 14.
India purchased the gold at an average price of about 1045/oz, according to an IMF official on a conference call.
