The World Gold Council, a producer group supported by the world's biggest miners, may start selling gold-backed securities in Italy, Germany, Belgium, the Netherlands, Luxembourg and India.
The securities, also known as exchange-traded funds, will be similar to the one already traded in London, Burton said. The council has also backed funds traded in New York, Singapore, Mexico and France. The existing securities, introduced from 2004, represent a total of $11 billion of gold. „Investment demand for gold will remain strong,” James Burton, chief executive officer of the London-based council, said in an interview yesterday. „Investors like to buy at home if they can. That's why we're planning to expand into continental Europe and the Far East.”
Gold for immediate delivery reached a 26-year high of $730.40 an ounce in May, partly as investors bought the metal as a hedge against inflation amid record energy prices. Gold, which has since slumped 16%, may reach a record $850 an ounce this year, Web-based data, news and analysis provider TheBullionDesk.com predicted yesterday. Gold exchange-traded funds allow investors to buy or sell gold without taking delivery of the physical gold. The securities are backed by gold held in a vault on behalf of investors.
Investor purchases of gold through exchange-traded funds stands at 18 million ounces, according to exchangetradedgold.com. Gold for immediate delivery rose $2, or 0.3%, to $613.60 an ounce as of 8:25 a.m. in London. Burton, a former CEO of the California Public Employees' Retirement System, joined the World Gold Council in 2002. India is the world's biggest gold consumer. Italy is the second-biggest buyer of gold for jewelry, after India. (Bloomberg)