The precious metals commentary offered up by the mainstream financial media is getting more interesting by the day. Just this morning, this Bloomberg story lamented the loss in value incurred by central banks since the gold price peaked back in 2011.
The World Gold Council says they added 534.6 metric tons to reserves in 2012, the most in almost a half century, and expects purchases of 450 to 550 tons this year, valued now at as much as $25.3 billion.Central banks are the biggest losers, with about $560 billion of value erased since gold reached a record $1,921.15 an ounce in September 2011.
Well, yeah, since central banks are the biggest holders of gold, they’re the biggest losers over the last couple years, but they’re also the biggest winners over the last decade or so as the price rose five-fold from under $300 an ounce. But, the implication here is that recent buying of the metal by emerging market central banks was kind of dumb since many of those purchases were made at higher prices.
Later, the authors write:
The timing of the rout is surprising because the events that sustained the bull market in the last several years are still unresolved.
Yeah, it kind of makes you wonder.