GO
Loading...

Strategist: Central Banks Can’t Save Gold

Tuesday, 28 May 2013 | 3:46 PM ET
Will Central Banks Save Gold?
Tuesday, 28 May 2013 | 1:05 PM ET
Central banks have sped up their gold purchases. Do banks still believe in gold? A discussion, with Kathy Lien, BK Asset Management, CNBC's Jackie DeAngelis and the Futures Now Traders.

The central banks of Russia, Kazakhstan and Azerbaijan all boosted their gold purchases in April, according to a report on Monday from the International Monetary Fund.

Together, the three countries bought up some 24,125 pounds of gold in the month. And as a whole, central bank net purchases contributed to more than 11 percent of the demand for gold in the first quarter of 2013, according to the World Gold Council.

So can the central banks save gold?

"I don't think that central bank buying is going to actually stop this decline in gold," said Kathy Lien of BK Asset Management. That said, central bank purchases "are certainly stemming the slide, and gold would probably be closer to $1,200 if it wasn't for this demand by central banks."

So why doesn't she think those same purchases can save gold?

"You've consistently seen central banks increase their purchases over the last couple months," Lien said on Tuesday's episode of "Futures Now," "and yet you've still seen gold prices fall."

Anthony Bradshaw | Getty Images

That's why for Lien, the continued central bank purchases that she predicts will "not [be] enough to stop this yellow from falling."

In fact, this strategist sees gold prices going all the way down to $1,200, as the U.S. dollar continues to rise compared with other currencies.

_ By CNBC's Alex Rosenberg

Watch "Futures Now" Tuesdays and Thursdays at 1 p.m. EDT exclusively on FuturesNow.CNBC.com!

Like us on Facebook! Facebook.com/CNBCFuturesNow

Follow us on Twitter! @CNBCFuturesNow

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.