Dateline July 20, 2015: China is characteristically quiet about their gold purchases but recently has reported out for the first time since 2009, according to a recent article by Eddie van der Walt in Bloomberg. China gold purchase over the years has resulted in 1,658 metric tons of gold in Chinese reserves. This means they have been buying at a rate of about 100 tons of gold each year. The Chinese may be well on their way to 5,000 tons or more.
Drivers of the China Gold Purchase
Several factors appear to be driving the China gold purchase, according to the article. First, the Chinese appear desirous of adding diversity to their reserve base. This would enhance their ultimate goal of having the Yuan added to the International Monetary Fund’s basket of currencies. Although not specifically mentioned in the Bloomberg article, another reason that China might want to accumulate gold is potentially to make the Yuan a gold-backed currency. This would present a direct threat to fiat currencies such as the US dollar and the Euro, which currently control much of the global economy.
China is the world’s largest gold producer. China and India are the top gold consumers in the world. The demand for gold in Asia is strong. Further from the Bloomberg article: “As the banking community in China becomes more sophisticated, we’re going to see gold move east” says Peter Thomas, Sr. Vice President for metals at the Chigaco-based Zaner Group.
What Should You Do?
How does that play out for the average Joe? At this time gold price is very low, being mired in a bear market since 2009. With such low prices, this is an excellent time to consider purchasing gold as a hedge against a potential loss in the value of your savings and investment. You would also be on the right side of the rising Asian gold trend.
At this time, you can make some very smart purchases from our preferred broker, Golden Eagle Coins. Whether you wish to purchase straight bullion or gold coins, Golden Eagle will provide you with a great selection and superb prices. Purchase from them today!
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