Gold climbs above $2000 as more sovereign buying seen

<p>The US dollar is strong today but that hasn't halted the advance in gold. It's up $9.50 to $2005. Traders are eyeing last week's high of $2009 as short-term resistance.</p><p>The World Gold Council today reported that central banks bought 800 tonnes in the first nine months of the year, up 14% y/y. Of that, 181 tonnes went to China. The rise this year comes despite a record high in buying the year before at 1081 tonnes.</p><p>It's been rumored that China's central bank and its people have been big buyers of gold all year. The recent late-September dip in gold prices coincided with a Chinese holiday, adding to that belief.</p><p>Other central banks that have been buying include Poland at 57 tonnes and Turkey with 39 tonnes. </p><p>The speculation is that China and Russia are buying even more than is officially reported. </p><p>November is traditionally the seasonal low in gold followed by three months of buying into the next round of Chinese holidays. Next year, a dovish turn from the Fed and a fall in the US dollar could breathe further life into gold, which is at or near record highs against most other currencies.</p>

This article was written by Adam Button at www.forexlive.com.