Mexico has been added to the list of countries whose central banks are making large purchases of gold. The Central Bank of Mexico, Banco de Mexico, recently bought 100 tons of gold bullion. There are currently several central banks in countries with emerging economies that are buying gold. The most notable acquisitions have been made in China, India, and Russia, while smaller purchases have been made in Bolivia, Thailand, and Sri Lanka. Collectively, these countries have gone on the largest gold buying spree in four decades.

In the last two decades, central banks sold more gold than they imported. These days, central banks have become net gold buyers as governments around the world work toward becoming less dependent on the dollar or the euro. The loose monetary policies enacted by the US Federal Reserve and the piecemeal approach of reducing European debt have many fearing the effects of further inflation.

As UBS analyst Edel Tully stated, “The direction of U.S. monetary policy is the key theme this quarter, and the uncertainty surrounding this includes both the timing of any tightening decision as well as its implementation. This means that gold's movements in the coming weeks will be highly sensitive to the debates among Fed members."

Individual investors around the globe are also buying gold in record numbers. The impressive rise of the gold price to above $1,500 an ounce is largely due to investor interest in this “safe-haven” commodity. Unlike fiat currency, such as the dollar and the euro, gold has intrinsic value that endures instability in the global economy. In fact, the gold value typically increases dramatically when the economy falters as investors opt for safer investments.

Buying gold is easier than ever these days and offers many options. Gold exchange-traded products (ETPs) include exchange-traded funds, exchange-traded notes, and closed-end funds, all of which can be traded like shares on the world’s major stock exchanges.

A growing number of investors opt to purchase gold directly in the form of gold bullion bars (ingots) and coins. This provides direct physical management of a gold investment and is a reliable way to protect one’s wealth. Gold bullion bars can be purchased safely through experienced precious metal dealers who also offer an assortment of certified bullion coins including the highly prized gold South African Krugerrand and gold Canadian Maple Leaf coins. Such investments are relatively easy to buy, store, and sell as long as investors trade with a reputable precious metals company.