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Gold price back to evens for the week as Japanese pension funds look to double gold holdings – Gold at all time highs in Yen

The gold price has popped higher this morning taking it back to evens for the week and off about 1% for 2013.

Yesterday gold got as low $1643 before turning around and heading higher.

Gold $ (30 mins):

gold 8 jan 30 min 2012 Gold price back to evens for the week as Japanese pension funds look to double gold holdings   Gold at all time highs in Yen (click for sharper image)

The new Japanese prime minister Abe announced overnight that the Japanese government would be lending money to the ESM, Europe’s own bailout fund – this comes on the back of Abe’s announcement that he will ‘require’ the Bank of Japan to hit a 2% inflation target – see this for what that means for Japan and the rest of the world.

So it is absolutely no surprise that Bloomberg reports that Japanese pension funds are turning to gold:

Japanese pension funds, the world’s second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, according to an adviser to the funds.

Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present, said Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011…

…Japanese pensions oversee $3.36 trillion, according to human-resource and consulting services company Towers Watson & Co. Corporate pension funds in Japan will diversify 72 trillion yen in assets after domestic stocks produced little return in the past two decades, according to Daiwa Institute of Research…

Local pension funds last year for the first time allocated 2.1 billion yen, or 2 to 3 percent of their assets, in the gold- backed ETF of Mitsubishi UFJ Trust, a member of Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender, according to general manager Osamu Hoshi. The bank is in talks with several pension funds on gold, he said Dec. 20…

Government Pension Investment Fund of Japan, the operator of the world’s largest pension fund with 113.6 trillion yen, stays away from commodity investment as 67 percent of their assets were allocated to Japanese bonds, Sugeno said.

“Pension money invested in bullion is ‘peanuts’ at the moment,” Toshima said. “If 1 percent of their total assets shift to the metal, the gold market would explode.”

And for the record when measured in gold there has been absolutely no sign of ‘deflation’ over the past decade in Japan.

Gold Yen (weekly): 

Yen gold 8 jan 2012 Gold price back to evens for the week as Japanese pension funds look to double gold holdings   Gold at all time highs in Yen(click for sharper image)

As you can see in terms of Yen gold has gone up every year since 2000 – and in fact gold in Yen today is at all time highs.

This move by pension funds in Japan could be just what gold needs to see it make new highs this year – all that extra demand into a tight market means only one thing, higher prices.

And look for this trend to continue outside of Japan as pension funds finally wake up to gold worldwide.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-back-to-evens-for-the-week-as-japanese-pension-funds-look-double-gold-holdings-gold-at-all-time-highs-in-yen-9314/

Posted by on Jan 8 2013. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.
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