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China aims to surpass US in physical gold reserves
The solid demand for gold is not supported just by private individuals and panicky investors, but countries like China, India and Russia are ramping up investment in the yellow metal.
“… that the world’s biggest and fastest growing national economies are in the midst of an historic push to build up their stores of the precious metal,” according to Wealth Daily’s Luke Burgess.
“Today, the biggest buyers of gold aren’t private citizens or hedge-funds. Instead, nations like China, India, and Russia have moved forward to grab up every loose ounce of the metal…,” Burgess says.
There have been reports that the Chinese are buying gold assets to cover against rising inflation risk and global macroeconomic uncertainties. Beijing has long complained that the U.S. Federal Read more…
Mexico ramps up gold reserves at dollar’s expense
* Mexico ups gold reserves by over 90 tonnes in two months
* Mexic onow ranks 33 among official holders of gold (Changes dateline, pvs LONDON; adds comment, details)
By Dave Graham
The price of gold has risen by 11% this yearMEXICO CITY, May 4 (Reuters) – Mexico massively ramped up its gold reserves in the first quarter of this year, buying over $4 billion of bullion as emerging economies move away from the ailing U.S. dollar, which has dipped to 2-1/2-year lows.
The third biggest one-off purchase of gold by any country over the past decade took Mexico’s reserves to 100.15 tonnes — or 3.22 million ounces — by the end of March from just 6.84 tonnes at the end of January, according to the International Monetary Fund and Mexico’s central bank.
Gold has gained 11 percent this year, driven by concern over euro zone debt and the violence in the Arab world, as well as by the U.S. dollar’s 7.6 percent decline against a basket of currencies .DXY.
Sergio Martin, chief economist for HSBC in Mexico, said the government probably saw gold as a highly liquid asset that would reduce exposure to the falling greenback.
“They’re probably thinking that getting out of dollars and into gold makes sense because we know that the dollar has some trend to depreciate in the near future at least,” said Martin. “I don’t think they’re going to lose money Read more…
Richard Lehmann: China May Corner Gold Market
China has likely begun a campaign to convert its dollars to gold that could end up with the nation cornering the gold market, says Richard Lehmann, editor of the Forbes/Lehmann Income Security Investor newsletter.
China is alarmed about potential weakness for the dollar, he says in an interview with Steve Forbes.
So “I’m concerned that basically China is probably already on a program to diversify the dollar into gold. I don’t think they want any other fiat currencies or want to minimize that amount.”
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| Gold bars |
If China buys enough gold, at some point it can simply dictate the price, Lehmann says. And it has the means to do so, given that Chinese currency reserves total almost $3 trillion, and the world’s gold supply is now worth about $5 trillion, he says.
So China could “in one stroke, basically take control of the gold market and tie the dollar to gold so that effectively, if every six months the dollar deteriorates 5 percent, they can just upgrade the stated price at which they wanted to buy gold and thereby upgrade and up-value their gold reserves, but also keep the dollar in check.”
With plenty of other investors buying gold too, many experts expect it to continue rising. Richard Russell, author of the Dow Theory newsletter, says in a commentary obtained by King World News that the precious metal may reach $6,000 an ounce.
New Currency Arrangement and Revaluation of Gold Reserves Predicted
Chris Powell, Secretary/Treasurer of gata.org, is asked by James Turk, Director of The GoldMoney Foundation and Founder of GoldMoney if we’re heading towards a monetary train wreck. Chris expects the central banks to mobilize gold back into the monetary system. This would perhaps mean a new currency arrangement and a revaluation of the gold reserves. View the full 34-minutes interview at: www.goldmoney.com/powell-turk.
Gold buying spree grips Chinese households
In this world of chaos and tumult, the Chinese people know what to do to preserve their wealth – they buy gold. When Americans finally wake up, if that ever happens, there is a good chance that there won’t be any gold to buy at any price.
By David Lew
BEIJING (Commodity Online):An unprecedented investor interest in gold is turning Chinese households as store houses of wealth these days as people are on a gold buying spree across the rural and urban areas of the dragon country.
Bundles of news stories are these days written on the gold buying spree by the Chinese households. If not an overstatement, it is now a fact that people’s houses in China have soared in value thanks to the rising prices of gold in the last two years.
“People in China are buying gold like never before. They believe that gold is the best form of investment. So they are buying gold coins, bars and jewelery items and stocking up safely in their homes,” says Beijing-based bullion dealer J Kim Lee.
Quoting the World Gold Council figures, Lee says that if the gold buying spree by Chinese households goes on at the current pace, private gold Chinese demand may overtake Indian gold demand by 2014, giving the world’s two most populous nations two ounces of gold in every five sold worldwide that year.
Indian households are estimated to be owning 15,000 tonnes of gold. India continues to the largest consumer and importer of gold worldwide.
According to precious metals analyst Steven Jon Kaplan, a significant percentage of gold’s price increase in 2009-2010 was caused by the incremental demand from Read more…
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