Breaking from Moneynews.com China Massively Buying Gold The Wall Street Journal reports Friday that gold prices are soaring to record highs as a new powerful factor has emerged as a driver of that rally — China. According to the Journal, China is now buying huge amounts of gold fearing inflation as the Federal Reserve begins a new set of quantitative easing policies. The paper’s report — “China Buys In to Gold’s Allure” — cites key data released by China’s state-run Xinhua news agency showing that China imported 209.7 metric tons of gold in the first 10 months of this year. That’s a five hundred percent increase compared to the same period in 2009. China’s dramatic move into the precious metals market gives weight to rumors that Beijing fears massive dollar devaluation. Gold is considered a store of value during periods of currency depreciation and economic instability. “The trend is undeniable, gold demand in China is rising rapidly,” Walter de Wet, Standard Bank head of commodity strategy, told The Wall Street Journal. Editor’s Note: A powerful new book warns of the end of the “American Empire” and a massive dollar devaluation that investors must protect against — please read about it in the coming “Great Super Cycle” — Click Here Now. Xinhua reported that China purchased more than 209 metric tons of gold during 2010. The Journal reported such imports came in addition to the significant quantities of gold China mines each year. Today, China leads the world in gold production, and the World Gold Council estimates that China’s gold demand could double in 10 years. Many economists had long viewed gold as a stagnant asset. The Economist recently predicted gold prices would sag, as Indian consumers who buy the most gold for jewelry, would cash in their caches as the precious metal rallied above $1400 an ounce. But such sales are apparently being offset by both Chinese government purchases, as well as a new booming Chinese consumer market in gold. In a speech at the China Gold and Precious Metals Summit in Shanghai Thursday, exchange chairman Shen Xiangrong said the size of China’s gold purchases this year were big enough to absorb all of the gold that the International Monetary Fund had shed during that time period, the Journal article stated. And just this week, the Chinese securities regulator approved the country’s first gold fund designed to invest in overseas-listed gold ETFs. Earlier this year, China’s government loosened its restrictions on gold purchases by financial institutions and individual investors. In August, China began allowing more banks to import and export gold. Until several years ago, China’s gold market was strictly controlled by the country’s central bank. Editor’s Note: A powerful new book warns of the end of the “American Empire” and a massive dollar devaluation that investors must protect against — please read about it in the coming “Great Super Cycle” — Click Here Now. © Moneynews. All rights reserved.
Friday, 3 December 2010
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