Earlier this month, the government of India purchasd $7 billion worth of gold bullion and now there have been talks that India may buy more from the International Monetary Fund. When this news report hit, gold hit another benchmark at $1,180.
Gold has a long history that dates back 5,000 years ago, which many civilizations viewed as precious as the sun for its durability, rare appeal and some even saw it as having magical elements. The Egyptians mined gold and buried some of their great leaders, such as King Tutankhamen, in a 2,500 gold sarcophagus in an image of the king. King Croesus of Lydia was the first to order pure-minted gold coins, which the Romans conducted the same issuance in 50 B.C. The Incas used gold in their art, the Spaniards had a great imagination when first hearing about the discovery of gold and Isaac Newton dedicated twenty years of his life to alchemy.
Indeed gold is the hot commodity right now in the markets for fear of inflation and low interest rates. On Thursday, gold hit a record high of $1,194USD before dropping back down to $1,183 but a report released on Wednesday showed that the government of India is quite interested in purchasing more gold, according to Reuters.
Digital Journal reported earlier this month that India bought $7 billion, or 200 metric tons, worth of gold. After the news was issued to the public, gold went up another $20 to $1,183 at the end of the trading session.
Commodity Online notes that India’s investment of $7 billion has benefitted them with $800 million in profit.
VTB Capital commodities Analyst Andrey Kryuchenkov told AFP that gold is continuing to hit record highs because of “the (weak) dollar ... (and) also rumors (in the) Financial Chronicle that India is ready to buy more IMF gold. 1,200 dollars is still in sight, being the next target.”
The International Monetary Fund now has 203 more tons of gold for sale and India is one of the leading suitors to purchase that amount. AFP further reports that other nations are also following suit after Sri Lanka announced, according to Mine Web, that it bought 10 tons worth of gold from the IMF. Mauritius also purchased two tons of gold. Russia, Brazil and China are also in the running, especially come December, which should be an interesting time for gold bugs and bullion dealers.
As of 12:13 p.m. on November 26, gold is trading at $1,184.10USD and silver is priced at $18.53USD, according to CNBC.