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Mexico Increases Gold Reserves by 100 Tons in February & March

13 September, 2012

Bloomberg News and the Wall
Street Journal reported late last week on Mexico’s efforts to dramatically
increase its gold reserves in recent months by adding nearly 100 tons during
February and March of 2011. Experts are now predicting that this trend will
continue,with countries in emerging markets around the world now expected to
systematically increase holdings in gold over the coming months and years.

Jonathan Spall,director of
commodities distribution at Barclays Capital told the Wall Street Journal that
the purchase should be viewed as a positive trend for the value of the precious
metal,since Mexico only held around 6.9 tons of gold at the end of January
2011,making the recent purchases an impressive and rapid increase. “People are
gong to view this as bullish and will now be closely watching other countries
in the region and elsewhere for further changes.”

According to reports by Bloomberg
and the International Monetary Fund for example,the recent purchases mean that
gold now represents just over 4 percent of Mexico’s international reserves,and
the country is expected to be a big buyer of the precious metal for years to
come.

The Central Bank of Mexico claimed in an additional statement that was
reported by the Wall Street Journal last week that the that additional gold
purchases are an important part of the bank’s previously planned policy
regarding new investments and proper diversification of its assets. By
comparison,the Bank of Mexico has previously held most of its reserves in a
variety of US dollar-denominated investments,but since 2008 it has
systematically sold around $30 billion to strengthen the peso due to the
severity of the global financial crisis. Experts agree that the bank’s current
efforts to build up its gold reserves will provide Mexico’s economy with added
strength should future turmoil erupt on the global financial scene.

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