Central banks turn net gold buyers, cut euro zone debt: survey
"Gold's quality as a store of value and fears over reserve currencies are the main reasons that central banks turned net buyers of bullion in 2010," wrote survey author Nick Carver.
The survey's respondents, who manage central bank reserves worth $3.5 trillion in total or 35 percent of total world reserves, identified gold as a "safe" reserve asset at a time when rising sovereign debt levels and super-loose monetary policy from the world's major central banks sapped confidence in more traditional reserve currencies.
"Both the euro zone and the U.S. are confronted by large deficits with simultaneously modest growth, which has influenced the value of their currencies and raised questions about debt sustainability," said one respondent.
Gold, investment grade corporate bonds and AAA-rated bonds were the three assets that reserve managers saw as more attractive than the year before.
Over 70 percent of the managers surveyed said central banks were likely to remain net buyers of gold given the level of uncertainty about sovereign debt.