AFRICANEWSWIRE.NET (June, 11 2012) Central banksa> bought another 70.3 tonnes of gold bullion in April and, according to Michael Lombardi, lead contributor to Profit Confidential, he believes that they will continue to pile into gold bullion.
“We’ll see how the rest of 2012 shapes up, but if central banks continue at this pace of gold bullion buying, they will surpass their record purchases of last year,” suggest Lombardi.
In the article, “Central Banks Buy Another 70.3 Tonnes of Gold Bullion in April,” Lombardi makes the case that, since gold bullion has never reached a bubble level in this current run, he thinks it can’t pop.
“Asian central banks and emerging economy central banks continue to lead the world in gold bullion purchases,” suggest Lombardi.
As the financial crisis in Europe continues to escalate and central banks including the U.K. and Japan continue to print money, Lombardi thinks that Asian central banks will buy gold bullion as currency instead of the euro, the yen or the pound, and as an insurance policy against another financial crisis and/or money printing.
“The Philippines was the largest purchaser by far in March 2012: 32 tonnes,” suggest Lombardi. “This was the largest addition to a country’s reserves since Mexico purchased 78 tonnes of gold bullion in early 2011. Twenty percent of the Philippines’ currency reserves now consist of gold bullion.”
Lombardi also notes that this is the seventh month in a row that the Philippines’ central bank has been buying gold bullion.
“Does it sound like a bubble if buyers are stepping in while gold prices decline?” asks Lombardi. “If it were a bubble, people would be selling as prices decline in the hopes of getting out at any price before prices completely collapse; that is the nature of bubbles.”
Lombardi thinks that central banks are using the recent drop in gold prices to accumulate.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
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Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com. Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.