Bolivia is the latest central bank to join the gold buying bandwagon. Falling global supply as local demand increases translates into severe shortages if price is not allowed to equilibrate demand. How many times have the US mint suspended coin sales this year?
Headline: Bolivia Central Bank to Buy Local Gold Output to Boost Reserves
Bolivia’s central bank will buy gold from local producers to boost its international reserves, the Andean country’s Vice President Alvaro Garcia Linera said today.
Bolivian President Evo Morales enacted a law authorizing the bank to buy gold through state mining company Empresa Boliviana de Oro, Garcia Linera said in a speech broadcast by La Paz-based television station Bolivision.
The bank will pay miners the same rate as traders who sell the gold to Brazil and Peru, Garcia Linera said. Bolivia’s central bank has increased its international reserves 10-fold to $11 billion since 2005, he said.
Bolivia produced 6 metric tons of gold last year, down 14 percent from 2009, according to the Mining Ministry.