Via Peter Schiff

  by   0   

According to a report by an Indian TV station, the board of the Reserve Bank of India (RBI) is considering significantly raising its gold reserves.

According to the report, the RBI is mulling upping its gold holdings from the current level of 6.5% of total reserves to 10%. As part of the move, the Indian central bank would also lower its holdings of US Treasuries.

Officials will create a roadmap for increasing gold reserves and consider it at the next RBI board meeting in October.

The Indian central bank has already been buying gold. According to World Gold Council data, India has added 22.7 tons of gold to its reserves so far this year. The value of its current gold reserves stands at about $39.785 billion.

Former RBI Deputy Governor R Gandhi noted that the RBI’s gold holdings have been inching up over the last five years.

In 1991, gold gave real support to the economy and it is an important element of the country’s reserves.”

According to the TV report, “A weak US dollar is leading to various central banks beefing up their gold reserves.”

In other words, many central banks are dumping dollars and buying gold.

Central banks globally have been increasing gold holdings over the last few years. Central bank demand came in at 650.3 tons last year. That was the second-highest level of annual purchases for 50 years, just slightly below the 2018 net purchases of 656.2 tons. According to the World Gold Council, 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record.

READ ALSO  Luckin Coffee: Attempting To Reach Profitability With A Dwindling Cash Balance (NASDAQ:LK)

The pace of buying has slowed somewhat this year, but continues at a healthy pace. Through the first half of 2020, central bank net purchases of gold totaled about 233 tons.

Several central banks have specifically launched programs to increase gold reserves. Late last year, the Serbian central bank began buying gold. National Bank of Serbia Governor Jorgovanka Tabakovic acted on the advice of Serbian President Aleksandar Vucic, who suggested the gold purchase as a way to increase the country’s financial stability.

Serbia was the third Eastern European nation to buy large amounts of gold. Poland added 100 tons of gold to its reserves through the first half of 2019, saying, “Gold is the ‘most reserve’ of reserve assets: it diversifies the geopolitical risk and is a kind of anchor of trust, especially in times of tension and crises.” And late last year, the Hungarian central bank announced it boosted its gold reserves 10-fold. A statement by the bank said the increase in gold stocks was intended to increase financial stability and strengthen market confidence. 

In keeping with the historical role of gold, it remains one of the safest instruments in the world, which, even under normal market conditions, exposes its stability and confidence.”

Peter Schiff has talked about central bank gold-buying. He has noted that the US went off the gold standard in 1971, but he thinks the world is going to go back on it.

The days where the dollar is the reserve currency are numbered and we’re going back to basics. You know, everything old is new again. Gold was money in the past and it will be money again in the future, and central banks that are smart enough to read that writing on the wall are increasing their gold reserves now.”

Ron Paul made a similar point in an episode of the Liberty report. He said foreign central banks are increasingly gravitating to sound money like gold and ripping themselves away from the Fed’s dollar.

READ ALSO  Nikola founder bought truck designs from third party

WhyBuyGoldNowBanner.070815.590

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.

Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!