Ahead of that G20 gold standard, surely.
Riyadh: There has been an unprecedented demand for gold in the Saudi market recently, with over 13 billion Saudi riyals (Dh12.75 billion) being spent on the yellow metal during the last two weeks.
Demand is expected to rise still higher as more investors turn to gold as a safe haven in the midst of the global financial crisis, according to market sources.
Sami Al Mohna, an expert on the gold market, said the trend had resulted in a substantial rise in the gold reserves of Saudi investors.
Since soaring to an all-time high of $1,033.39 per ounce in March this year, gold has plummeted 30 per cent.
Gold for December delivery on Monday rose $8.60 to settle at $726.80, roughly the same level at which it traded a year ago.
‘Many Saudi investors see this as the right time for making investments in gold as its price is the most reasonable one at present,’ said Al Mohna.
That’s from Gulf News. It seems to be just local investors (not the government) snapping up the gold — about $3.5bn worth.
Spot gold is, as noted above, still at relatively modest levels, having fallen from its March record to about $740 an ounce. Meanwhile demand for the actual physical stuff is booming, by anecdotal evidence, at least. Time for another gold conspiracy here?
Arabianmoney.net blogger Peter J. Cooper, for one, thinks not.
… we do know that the Saudi stock market has crashed over the past two weeks. There has been an enormous amount of money cashed out. The obvious source of the money for gold purchases has to be that money.
The problem for Saudis is that by cashing out of local stocks they get their own riyals in exchange, and riyals are effectively US dollars due to the currency fixed link. The US dollar is presently high, so diversifying into another asset class makes sense.
I think some of the conspiracy theorists are wide of the mark. People love to come up with elaborate rationales for actions. It is laughable to see Saudi Arabians rushing to buy gold as a conspiracy to bring down the West. The West has brought that on itself, and the Saudis are just trying to find an effective shelter for their wealth from that collapse.
Related link:
Gold at $53,000 an ounce? – FT Alphaville
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