China and Gold

China is now overtly pushing for the US dollar to be replaced as the world's reserve currency.

Xinhua, China's official press agency on Sunday ran an op-ed article which kicked off as follows:

"As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world."


China does have a broad strategy to prepare for this event. She is encouraging the creation of an international market in her own currency through the twin centres of Hong Kong and London, side-lining New York, and she is actively promoting through the Shanghai Cooperation Organisation (SCO) non-dollar trade settlement across the whole of Asia. She has also been covertly building her gold reserves while overtly encouraging her citizens to accumulate gold as well.


There can be little doubt from these actions that China is preparing herself for the demise of the dollar, at least as the world's reserve currency. Central to insuring herself and her citizens against this outcome is gold. China has invested heavily in domestic mine production and is now the largest producer at an estimated 440 tonnes annually, and she is also looking to buy up gold mines elsewhere. Little or none of the domestically mined gold is seen in the market, so it is a reasonable assumption the Government is quietly accumulating all her own production without it becoming publicly available.


Recorded demand for gold from China's private sector has escalated to the point where their demand now accounts for significantly more than the rest of the world's mine production. The Shanghai Gold Exchange is the mainland monopoly for physical delivery, and Hong Kong acts as a separate interacting hub. Between them in the first eight months of 2013 they have delivered 1,730 tonnes into private hands, or an annualised rate of 2,600 tonnes.


The world ex-China mines an estimated 2,260 tonnes, leaving a supply deficit for not only the rest of gold-hungry South-east Asia and India, but the rest of the world as well. It is this fact that gives meat to the suspicion that Western central bank monetary gold is being supplied keep the price down, because ETF sales and diminishing supplies of non-Asian scrap have been wholly insufficient to satisfy this surge in demand.


So why is the Chinese Government so keen on gold? The answer most likely involves geo-politics. And here it is worth noting that through the SCO, China and Russia with the support of most of the countries in between them are building an economic bloc with a common feature: gold. It is noticeable that while the West's financial system has been bad-mouthing gold, all the members of the SCO, including most of its prospective members, have been accumulating it. The result is a strong vein of gold throughout Asia while the West has left itself dangerously exposed.


The West selling its stocks of gold has become the biggest strategic gamble in financial history. We are committing ourselves entirely to fiat currencies, which our central banks are now having to issue in accelerating quantities. In the process China and Russia have been handed ultimate economic power on a plate.

 

As the global stock markets plummeted in reaction to China's economic woes, online bullion dealer, GoldMoney, has reported a rise in interest from its customers for gold bars to be delivered to their homes.

GoldMoney Dealing Manager, Kelly-Ann Kearsey said, "While the gold price did hit a seven week high, it hasn't reacted to the stock market swings as much as we might expect. However, it's obvious that some people are concerned because this week we saw orders from the UK, US, and Canada for physical bullion bars to be delivered to customers' homes."

"We've had a busy week all round, with gold by far the most popular metal in busy buying activity, which is unusual for the holiday period. Silver has, to a lesser extent, also featured prominently on the buy lists, while the more industrial metals, platinum and palladium, have languished with some profit-taking on palladium."

"Federal Reserve head, Janet Yellen's comments about the rate rise not being imminent helped to depress the dollar a little and lift gold hopes, but today's better than expected US GDP figures have quashed that effect somewhat. However, we are still seeing our customers actively buying as the uncertainty in global markets sends people towards the safe haven and wealth preserving qualities of gold."

Week on week price performances
27/08/15 16:00. Gold down 2.3% to $1,123.11, Silver down 7.4% to $14.32, Platinum off 2.7% to $996.24 and Palladium down 9.8% at $554.97. Gold/Silver ratio: 78

 

NOTES TO EDITOR
For more information, and to arrange interviews, please contact Emily Cornelius, Communications & PR Tel: + 1 647 499 6748 or email: This email address is being protected from spambots. You need JavaScript enabled to view it.

GoldMoney
GoldMoney is one of the world's leading providers of physical gold, silver, platinum and palladium for private and corporate customers, allowing users to buy precious metals online. The easy to use website makes investing in gold and other precious metals accessible 24/7.
Through GoldMoney's non-bank vault operators, physical precious metals can be stored worldwide, outside of the banking system in the UK, Switzerland, Hong Kong, Singapore and Canada. GoldMoney partners with Brink's, Loomis International (formerly Via Mat), Malca-Amit, G4S and Rhenus Logistics. Storage fees are highly competitive and there is also the option of having metal delivered.
GoldMoney currently has over 20,000 customers worldwide and holds over $1billion of precious metals in its partner vaults.
GoldMoney is regulated by the Jersey Financial Services Commission and complies with Jersey's anti-money laundering laws and regulations. GoldMoney has established industry-leading governance policies and procedures to protect customers' assets with independent audit reporting every 3 months by two leading audit firms.

Further information:
Visit: Goldmoney.com or view our Video.