Gold Prices Could Be Setting Up to Outperform Other Assets, Just Look at the Buyers
If you are worried about daily fluctuations in gold prices and are forgetting the big picture, you could be making a big mistake. This is a bold statement, but don’t be shocked to see gold prices outperforming a lot of assets in the next few years.
You see, gold isn’t getting much attention these days, and rightfully so; the yellow precious metal hasn’t done well at all. Investors tend to ignore things that are underperforming.
But sooner rather than later, this could turn.
Know that we have big buyers remaining in the gold market. Their actions tell us that they want a lot more of it.
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Russian Central Bank Remains Consistent Gold Buyer Since 2006
For example, look at the Russian central bank.
Russia, over the past few years, has come under fire and a lot of sanctions have been placed on the country. So the central bank of Russia is doing all it can to insulate itself. It’s buying a lot of gold because the yellow metal is great at this.
In July, the Russian central bank bought 26.1 tons of the yellow metal. It now holds 2,170 tons in reserves. (Source: “Russian Central Bank Buys More Gold in Face of Tougher Sanctions,” Bloomberg, August 22, 2018.)
The gold purchases in July by the Russian central bank were the highest since November 2017.
Also, know that since July 2006, the Russian central bank has been a very consistent gold buyer.
It is really hard to conceive the idea that the Russian central bank is done buying gold. It may need a lot more to protect its reserves. The precious metal it has on hand is worth just about $80.0 billion.
China Buying a Lot of Gold
China is worth watching closely as well.
It’s not only the consumers in the country who like gold; the People’s Bank of China likes gold, too.
We are seeing a lot of gold going into the country and it doesn’t look like gold prices matter to the buyers whatsoever.
