The Daily Reckoning had an interesting article:
The reason is easy to see if you read the article backwards, in that there was a question about central bank buying "last week, when gold saw a record single-day gain", especially Chinese central bank buying of gold, which is already the ninth-largest holder of gold in the world but which holds only 1% of its foreign-exchange reserves in gold, although it actually said it would like to hold more. And Mark O'Byrne at Gold & Silver Investments says that he would "be surprised if the Chinese hadn't been nibbling at the gold market,", which leads to the news that Asian banks "are seen as keen buyers" of gold, which leads to the news that "other central banks are now far more likely to be holders of gold", which leads us back to the second paragraph that "Turbulence in the financial markets and recent U.S. dollar weakness are helping the precious metal claw back its reputation as the central monetary anchor within the international monetary framework", which leads to the opening paragraph of "Central banks may be starting to turn one of the few assets in which they can invest; gold."
In short, those crafty Chinese, a fifth of the world's population, may be getting ready to issue a gold-standard money, which will instantly make their currency the strongest in the world, which is just what a country needs if it wants to import a lot of things cheaply so as to respond to demand for internal economic growth without stoking inflation in prices!
And, fortunately for those of us who both love to have large profits handed to us and who also own gold, a Chinese gold-standard may soon make a dream come true as gold would skyrocket when priced in suddenly depreciated dollars.
And from Dow Jones:
Austria Ctrl Bk Official: Some Central Banks May Buy Gold
KYOTO, Japan (Dow Jones)--Central banks that currently have little or no gold in their reserves could be considering buying gold to mitigate foreign exchange movements, Austria National Bank's manager of foreign reserves said Monday.
"I can well imagine that some central banks that don't have gold reserves are thinking about buying gold. But it's not about raising the percentage of gold in proportion to their foreign reserves to similar levels like Western banks," Peter Zoellner told Dow Jones Newswires on the sidelines of the London Bullion Market Association conference in Kyoto, Japan.
What people used to consider far fetched, is now getting discussion.