Here's a shocker: India's central bank just bought 200 tons of gold.
India paid $6.7 billion to the International Monetary Fund for the gold, securing the equivalent of 8% of the world's annual production. India's move is a clear signal that Asia is moving away from the U.S. dollar.
India's finance minister said the reason for the purchase was that the economies of Europe and the US had "collapsed."
India's purchase pushed gold prices to $1,086.10 per ounce. December gold futures are trading at $1084.60 per ounce, up $30.60.
India's finance minister said, "We have money to buy gold. We have enough foreign exchange reserves."
New Delhi's purchase came a few months after China revealed that it had almost doubled its gold purchases. It is believed that China, Saudi Arabia and Middle Eastern sovereign wealth funds have enough money to buy the remainder of the IMF's gold reserves.
What does all of this mean? Simply put, Asia and the Middle East are getting out of dollars and putting their money in gold. They are rapidly losing faith in the economies of Europe and the US. How all of this plays out remains to be seen.
Would you buy gold now?