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Difficult To Quantify, But Iraqi Gold Purchase Helped Push Gold Prices Towards $1,400: Peter Hug
By Kitco NewsWednesday March 26, 2014 1:52 PM
(Kitco News) - Following Tuesday’s news that the Central Bank of Iraq purchased $1.56 billion of gold in March, many were left wondering why gold was not moving upwards.
Peter Hug, Kitco’s Global Trading Director says the impact of the purchase is difficult to quantify.
He added though it makes sense that Iraq bought gold to diversify their reserves and support the country’s currency, the dinar.
“Iraq is generating oil revenues again and they are going to deploy some of those cash reserves into gold,” explained Hug.
The question, he said, is how to quantify the reaction to the gold price.
“The purchasing of this gold sort of came at a time which coincided with the issues in Ukraine. I certainly think it helped push the pricing higher while the Ukraine safe haven demand was occurring,” Hug told Kitco News’ Alex Létourneau in an interview.
“I can’t quantify how much of that push from the thirteen to $1400 level could be attributed to Iraq buying of gold or primarily a Ukraine driven event,” said Hug.
Iraq purchased 36 metric tons of gold in March, the largest purchase by a nation in three years. According to news reports, the Central Bank of Iraq bought gold to support the Iraqi dinar against foreign currencies. The International Monetary Fund’s website said as of August, Iraq held about 29.8 tons of bullion.
Related Stories:
- Lack Of Gold Rally On Iraq Purchase News 'Horrible' Sign - Analysts
- Iraqi Central Bank Announces It Bought 36 Metric Tons Of Gold
Watch Peter Hug’s full Interview.
By Daniela Cambone of Kitco News dcambone@kitco.com
Follow Daniela Cambone on Twitter @DanielaCambone
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