Monday, 3rd July 2006 (3904 views)

The governor of the United Arab Emirates' Central Bank, Sultan bin Nasser Al Suwaidi, has hinted that the Middle Eastern country may look into converting some of its currency reserves into gold in the near future.

The currency reserves held by the UAE Central Bank are currently in US dollars but in a bid to diversify its economic securities, Mr Al Suwaidi has suggested the nation's national bank would buy into gold and the European currency.

"I don't think it is appropriate to buy gold now - it is too expensive," he told reporters, before confirming: "The appropriate time might come very soon. We could go up to ten per cent.

"We are waiting for [market] conditions to change," he added, with analysts suggesting the time earmarked for a UAE buy-in to be later in the year, possibly after the summer months are over.

Gold is presently fluctuating in price on stock markets across the globe and analysts say that such unpredictability may prevent substantial investment.

This period of unpredictability follows a strong few months of growth that culminated in the highest price since the early 1980s for the precious yellow metal, over $700 an ounce.

 

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