Gold And The Central Banks, 2009

The Times of London Online has webbed an article about the shift in the tide for central banks - specifically, emerging-market central banks.

There is little to beat the lure of gold, as many recipients of a lavish Christmas gift will confirm, but it is not only seasonal impetus that has put a new shine on the precious metal — for the first time in 21 years the world’s central banks have been net buyers.

World Gold Council (WGC) data reveals that amid growing concern over the weakness of the dollar, about $28 billion of bullion was bought by central banks this year, based on an average price of $978 an ounce....

Traditionally, the central banks have been the butt of goldbug jokes - particularly, the developed-countries' central banks. Gordon Brown's served as the resident fool for selling some of the U.K.'s gold into the "Brown bottom." Those who like to believe that the developed countries' central banks are as ham-handed as ever, will be pleased to learn that the central banks of France, Sweden and the Netherlands have sold some gold this year. Not to mention the IMF.

However, emerging-economy central banks aren't exactly converted to the new way of gold. As this Wall Street Journal Online article reports, most of the diversification out of the greenback went into the euro.