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The recent rise in risk aversion has triggered strong inflows into the Gold Exchange Traded Funds (ETFs) and a simultaneous increase in demand for gold coins and small investment bars.

On January 28, 2008, gold holdings of the World Gold Council's gold Exchange Traded Funds SDPR stood at 832 tonnes. By February 12, they had grown to 935 tonnes a growth of almost 100 tonnes in two weeks.

SDPR fund held just 8.09 tons when it began November 18, 2004. There are many other gold bullion-holding funds in the developed world from London to Switzerland that are not included in list. If they are included, the total Gold ETFs would be approaching 1300+ tonnes. Clearly we are seeing a stampede of institutional fund management into gold at present.

The Central Banks of the world are the largest holders of gold in themselves, despite that unquantifiable fact that around 20,000 tonnes of gold are held privately across the Indian sub-continent.

So as to give us a sense of proportion on the top cats in the neighborhood, here are the current gold holdings of the top 9 central banks in the world.

If we are to take the entire privately held gold Exchange Traded Fund shares, they would represent more gold than held by the Swiss National Bank, Switzerland's central bank. Japan was overtaken a long time ago.

COMEX Gold has resistance at $950/ oz and $980/ oz. If prices sustains above these levels,we could see new record high in 2009. In India, We could see levels of Rs 15000 / 10 gm with in 10 days.

Renisha Chainani is Research Analyst, Anagram Capital Ltd, India

SOURCE: http://www.commodityonline.com/news/Stampede-for-investment-into-Gold-ETFs-15165-3-1.html


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