The Bank of Korea, diversifying foreign-exchange reserves away from a falling dollar, said that additional gold holdings aren’t attractive as most other central banks aren’t buying and the metal offers no cash returns. “There’s an illusion in gold,” Lee Eung Baek, head of the bank’s reserve-management department, said in an interview. “We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?”
Full article link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag2cRG2_O1Jk
Sounds like another Central Bank head once again makes a disastrous investment decision. Let's not forget how the head of Britain's Central Bank sold its gold holdings at around $250/ounce at the beginning of this decade, right at the bottom. If gold is not the big trend, then why is it virtually the only asset class out there touching new records? It has risen consistently every year for the last decade from $250/ounce to $1150/ounce. If this is not the big trend, then I don't know what is. Let Lee Eung Baek continue to hold on to the 'big trend' of ever depreciating US dollar reserves. Or maybe the 'big trend' is the 'safety' of the S&P 500, which is no higher than it was 10 years ago. Some Central Bankers will never learn.
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