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Safe-haven assets continue to gain preference

CCTV.com

07-27-2016 00:18 BJT

The world's central banks have been increasing their holdings of gold.

The World Gold Council says the world's central banks are holding a combined 33,000 tons of gold, up 2.7 percent from last year. Countries have been stocking up on gold now for six years in a row.

China has been one of the major buyers. Its gold reserve now stand at 1.8 thousand tons. It has risen 70 percent in only a year. The country now ranks fifth in the world in terms of gold reserves.

But a few countries are selling their gold, but only because they have to. South American oil producing Venezuela has sold 43 percent of its gold reserves in the past year to pay back its debt. The country's balance sheet is suffering from low commodity prices and falling exchange rates.

Some analysts are sounding warning bells as countries and individuals flock to gold. They say that's because safe havens such as gold and treasuries are forming bubbles that might no longer make them relatively risk-free assets. Those who are going short on gold are advising clients to sell when prices are inflating quickly.

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