CNBC reports on why this is beneficial for the banks:
“By holding more gold central banks are insuring themselves against their own profligacy. They print money. The price of gold goes up. And if they hold a lot of the stuff in their vaults, they are the big winners from the rise in price,” Matthew Lynn, founder of Strategy Economics, wrote in a research note.
“If you can pull it off – and there isn’t anything to stop you – that sounds like an easy way to make a living.”
As far as individual investors are concerned, Macquarie Private Wealth is urging you all to buy on this dip. Despite the gold's recent downward pull, are are the five reasons Macquaire says you should get gold now:
Sentiment towards gold has no[w] reached “extreme pessimism” levels.
March is seasonally the weakest month for gold.
Excess slack in the US economy will prompt the Fed to say on hold until 2014, as indicated, keeping short rates low.
The extent of the long-term rate rise is over. The Fed will ease some more.
Sovereign risk is not over.