Data produced by the World Gold Council (WGC) shows that whilst concerns have grown about the weakening dollar, about $28 billion worth of gold was bought by central banks this year.
The countries to buy gold on the largest scale have emerged as China, Russian and India. But significantly smaller countries have also invested in gold like the Philippines, Kazakhstan, Sri Lanka and Mexico.

The value of the dollar, which has long been the default reserve currency for most countries, has dropped as investors have grown anxious about America’s massive debt burden and likely inflationary trends.

The fall in the value of the dollar means that the national savings of countries such as China have diminished and now gold is perceived as a better and more reliable store of wealth.

A person who remained anonymous and has not yet revealed their identity placed a Canadian gold coin worth hundreds of dollars into a Salvation Army collection tin last week.

The coin which dates from 1990 has the face of the Queen on one side and a maple leaf on the other. It has a face value of $50 but in the current climate where investors are keen to buy gold because of its increasing value it could be worth much more.

As we’ve reported recently gold is being sold for around $1,100 per ounce at the moment and has had an unprecedented rise in price this year.

The Salvation Army is delighted to have received the unexpected gift particularly because this is a demanding time of year for their services.

Economic uncertainty this year has led investors to seek a safe haven in traditionally safe assets. More have decided to buy gold in this unpredictable year.

The price of gold continues on a generally upward trend with small fluctuations caused by external factors.

The price of gold has recently topped record highs reaching a value of above $1200 and ounce.
There is growing optimism that the US unemployment figures will slowly improve and manufacturing output is looking like it will begin to increase.

Last month renowned commodities trader Jim Rogers predicted that gold could double in price during the next few years to more than $2000 an ounce.

Until November, the rising gold price was thought to be a direct response to the weakening US dollar. It now looks like people are seeking physical assets to protect their investments against inflation with little regard for supply and demand. This high level of demand is pushing the price up as gold is a finite commodity.

Gold is seen by investors as a global currency and a good hedge against inflation or political uncertainty. Mostly, it retains its value well during time of economic uncertainty.

Reports today indicate that spot gold prices have steadied after recent uncertainties with news that Dubai is to receive a bailout from its neighbour, Abu Dhabi. The news of the $10 billion bailout after the financial collapse of Dubai has increased confidence in the gold market but weakened the dollar.

Dubai plans to use a proportion of the bailout to repay the debts at Dubai World. The news has settled investor’s nerves and now they are continuing to buy gold.

Spot gold rose to a high of $1,127 an ounce before easing back to $1,123.50 as the markets fluctuated.

Gold continues to feature all over the press and media as its price continues to rise consistently and investors continue to buy gold. For example, the prime-time daily magazine programme “The One Show” featured an article on gold in a recent programme.

BBC televisions financial reporter, Adam Shaw, questioned where financial security could be found in our current economic crisis. A representative from the gold industry explained that gold is an excellent investment for private individuals because it is a physical and indestructible product that will hold its value even in troubled times.

Gold has continued its upwards trend reaching record highs of nearly $1,200 an ounce today and recovering from Friday’s losses.

For those wanting to buy gold, U.S. gold futures for December delivery were up $13 to $1,194.10 an ounce after reaching $1,199.30 this morning.

Gold prices had dropped by approximately 5% on Friday because of concerns about the request from the state-run investment company of Dubai to postpone repayment of their $60 billion debt. Talks today have eased worries that it would default.