Let's say you owe the world €2 trillion, but you also hold the world's fourth largest hoard of physical gold. Sounds like a no-brainer, right? Use Italy's gold to pay Italy's debt. Trouble is, Rome's gold would be worth only a drop in the bucket. The gold isn't Rome's to sell either.
Gold prices climbed more than 2% following the start of trade in London on Friday - breaching $1,876 per ounce around lunchtime - after the publication of weak US jobs data. Nonfarm payroll data showed the US economy added no jobs in August
Central banks have been on a gold buying spree and that could soon be matched with other global banks if gold's quality as an asset gets upgraded to Tier 1 status by the Basel Committee on Banking Supervision.
The gold price 'is likely to be range bound' until New Year, says Ong Yi Ling at Phillip Futures in Singapore. Holidays over the next week mean 'It will be pretty difficult for gold to actually master sufficient momentum to move above the $1,400 level.'