Nov. 3 (Bloomberg) -- Gold jumped to a record after India’s central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation that there may be more official purchases.So how much is 200 metric tons? Well, they held 350 metric tons before, so this is a 57% increase in their gold holdings in one day. Why did they do this?
Central banks, the biggest holders of gold, may diversify out of the dollar and buy bullion as ballooning U.S. debt and low interest rates weaken the currency.If that's still a bit obscure to follow, allow me to show the reason gold is shooting up and the dollar is tanking with a simple chart.
“It is but a matter of time until China and the IMF announce much of the same,” said Dennis Gartman, an economist and the editor of the Gartman Letter in Suffolk, Virginia.