Central banks suffer $560bn gold loss

[miningmx.com] – THE decline in the price of gold this year has wiped
$560bn off the value of central bank reserves said Bloomberg News which added that
investors were dumping gold funds quicker than at any time in the last two years.

“There’s a perception that risk has been lessened, and with that, investors are looking
for assets that either generate income or have growth potential, neither of which gold
has,’ Anthony Valeri, a market strategist with LPL Financial Corp. told Bloomberg
News. “We’ve seen a grab for yield, and without a yield, gold has been left out.’

Gold-backed exchange traded products fell $37.2bn in 2013 as gold fell to a two-year
low on April 16. Net outflows from gold funds totalled $11.2bn this year – the most
since 2011, said Bloomberg News.

It added that central banks were the biggest losers because they own 31,694.8 tons
equal to about 19% of all the gold mine, said Bloomberg News citing the World Gold
Council.

The price of gold increased for 12 consecutive years but has this year fallen 29% from
its September 2011 record of $1,923.70/oz.

Growing economies and corporate profits, along with slowing inflation, boosted global
equities by $2.28 trillion this year at the expense of the traditional store of value,
according to data compiled by Bloomberg.

“It’s been a great 12-year run, but there’s increasingly less reason to be in gold,’ said
John Stephenson, a senior vice president and portfolio manager who helps oversee
$2.74bn at First Asset Investment Management Inc. in Toronto.