Venezuela's central-bank sales also prove
value of buying gold before crisis hits...
According to Adrian Ash runs the research desk at BullionVault the Central Banks of China and Russia are buying gold as a 'safe haven' according to analysts, growing their bullion reserves to defend against the worsening financial and economic outlook. The recent gold sales by Venezuela also demonstrate the metal's value in a crisis, analysts agree, as the former world No.13 central-bank holder raises cash by selling bullion, dropping to No.20.
China and Russia's move to buy gold is led by "growing fears over global economic growth and grave concern over the health of emerging market economies," writes analyst Robin Bhar at French investment and bullion market maker Societe Generale, calling it a "key...evident...theme highlighting central banks' view of gold as a safe haven asset." "Amongst emerging market economies," agrees a note from specialist analysts Thomson Reuters GFMS, also pointing to China, Russia and Venezuela, "gold's nature as a safe haven asset is growing in importance."
With the economy now shrinking at least 10% per year, collapsing into food riots and looting, data released to the International Monetary Fund show Venezuela cutting its gold holdings by 88 tonnes in 2015 and a further 43 tonnes in the first three months of 2016, raising valuable foreign currency amidst the domestic crisis hitting the government of Chavez's successor, Nicolas Madura.