They've got "deep pockets" and they're adding tons of bullion to their reserves
As
gold falls out of favor with investors in a "risk-on" trading environment, one expert says the market bears should think carefully about betting against the
precious metal at a time when central bank demand for
gold remains strong.
"When you see central bankers acquiring
gold, you can kind of take it like this: You don't fight in the stock markets when the Fed is easing, so you wouldn't want to fight the central banks when they're
buying gold, because they have deep pockets," Philip Silverman, managing director at Kingsview Management in New York, told CNBC on Thursday.
"As far as ETFs go, a lot of hedge funds have been burnt by holding
gold in an environment where equities are going through the roof. At the same time a lot of commodity trading advisors were getting out of
gold and then going short," he said. "The selling is much more of a reaction to what's going on with
gold right now. If you take a long-term horizon, it's a good time to add
gold."
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