Can China beat the U.S. in Gold Reserves in 10 years?

Re: Can China beat the U.S. in Gold Reserves in ...

Melody - I agree - there are on a roll & picking up steam.  We'll see the price of gold soon rebound & you & I will be smiling -   perhaps you might even find a new "golden melody" (pardon the pun) - you might share  - haha.

"Gold, gold won't be sold!

Keeps us all from growing old (& broke),

If we might be a little bold,

We will never fold!"

Re: Can China beat U.S? Gold output surges -Jan-May -127 tons

China Gold output
surges to 127.34 tons in Jan-May

Published on: July 19, 2010 at 18:25

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MUMBAI (Commodity Online): China’s gold output surged
by around 6% in the January to May period to 127.34 tons as compared to
the previous year, according to the Ministry of Industry and
Information Technology (MIIT).

Gold output in May alone stood at
28.3 tons, said the MIIT report.

Gold firms reported total net
profit of 7.95 billion yuan ($1.17 billion) in the first five months of
the year, up 76.81% from that of last year, the statement said.

In
the same period, the domestic gold sector reported 75.13 billion yuan
of gross industrial output value, up 52.5% year on year.

Re: Can China beat the U.S. in Gold Reserves in 10 years?

I agree Manlyman -  China will eventually surpass the U.S. in gold reserves & I predict they will back their Yuan with gold - other countries would be wise to do so as well.   However it is thought their own gold production will run dry by 2014 -  by that time they should have all they need.   They seem to be doing so much with disciplined thought.

Gold Rush grips China as people on buying spree

Gold rush grips China as people on buying spree
December 29, 2009 06:55:00 IST
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* Oil eases after five days of gains
* Crude Oil consumption to grow in 2010
* US sees rise in jewellery sales
* Chinese firms eye Canada’s copper miner
* China’s aluminum demand to shoot up by 15%

BEIJING (Commodity Online): As the year nears to a close and 2010 is all set to shine, there is gold glittering in the Chinese landscape. There is a mad gold rush going on across China as people are on the streets, swarming gold jewellery shops to buy coins, bars and ornaments during an year-end shopping spree.

China is today the world's largest gold market. China recently overtook India and emerged as the largest gold consumer in the world. The dragon land is the largest global gold producer.

In this following feature, China Daily reports on the ongoing gold rush in China:

"Gold jewelry sales jumped more than 30 percent over the weekend in Beijing, as bargain shoppers swarmed the city's major jewelry stores on year-end promotions.

In a collective sales campaign after international gold prices fell, stores including Caibai, Gongmei and China Gold reduced the pure gold's price by as much as 9 yuan per gram, with more Christmas-themed jewelry designs for shoppers to choose from.

According to the Beijing Morning Post, the China National Gold has doubled its sales to 40 kg per day. Caibai, the largest gold store in China, reported 30 percent more business than last year over the weekend after they drop the price from 278 yuan to 269 yuan per gram.

But the pure gold's price at Caibai is still 59 yuan per gram higher than last Christmas when it was sold at 210 yuan per gram.

"The gold price had kept rising in Beijiing this year, so this decrease somehow influenced customers' decisions," the marketing department manager of Caibai department who preferred to be known as Niu said yesterday.

Niu is also very optimistic about sales in the rest of the holiday season that spans from Christmas to the Chinese New Year in February. She said Caibai extended the trading hour from 8:30 to 9:30 pm on Christmas Eve, to serve the crowds of customers.

"I am looking for a gold pendant with a tiger on it," said a 23-year-old woman customer surnamed Yang, who was born in the year of the tiger.

"I have had this idea since October, but the price just kept rising. It is going to be the year of tiger soon, and they dropped the price a little bit, so I want to buy it now," she said on Friday.

Beijing residents showed keen interest when the limited edition gold bars for the Chinese Tiger Year went on sale earlier this month.

Caibai received 1.5 tons of orders while they were holding 1.3 tons of gold.

According to the Beijing Evening News, almost 20 kg of gold bars for investment were sold on Thursday morning after the price adjustment.

Beijing residents are also rushing to hoard the yellow metal, as they expect the economic inflation next year.

"I feel it is safer to invest in gold than other things in this period," said a business consultant surnamed Bai, who has been investing in gold since September this year. "The inflation in Beijing is quite obvious, but I can still keep my wealth after the economic bubbles break in Beijing."

Re 1st Oil & now Gold - China's Hidden Agenda (S. Kima)

China's hidden gold strategy

Having spent the better part of the
last two decades developing China's oil industry, the government is now
shifting its focus towards gold...

You see, China has never had an organized mining industry before, despite having some of the world's richest gold deposits.

How come?

Well, when the communist government took control in 1949, there was simply no desire to fund or create one.

Today, it's a different story... China has woken up and is spending a fortune on its mining industry.

At last count, it's estimated that 388 million ounces of UNMINED gold lie beneath China's soil.
That's 4-TIMES more than the annual production of ALL the world's gold mines, combined.
"Many parts of the country have gold reserves worth billions of dollars," reports The Star, one of Asia's biggest newspapers.

That's
why for the past few years the Chinese government has been quietly
setting the stage to capitalize on its vast gold reserves...

"Gold rush in China, people line up to buy gold"

~ Shanghai Daily

A few years ago, the Chinese government ran a "trial run," to gauge the public's demand for gold.

The results were astounding...

**At
China Merchant Bank, the line of buyers was so long that the bank
stayed open late into the night. They sold 1728 ounces of gold in just
4 days. One buyer spent more than $97,000 worth of gold...

**At Beijing Caibai Department Store, 10,582 ounces of gold bars sold out in just 7 hours. cannot find this

**When
Shanghai Lao Feng Xiang Co, Ltd. – Shanghai's biggest gold seller – put
529 ounces of gold up for sale, they sold out in less than 2 hours...

First, the government invited a handful of experienced foreign companies to mine and produce China's gold.

You see, the government knows that historically, in a gold bull market, small mining stocks rise, on average, five times more.

And
that's exactly why – in exchange for the rights to mine the biggest
deposits in the country – the Chinese government took a stake in two of
the most promising, experienced foreign companies.

Second, to
help sell the gold, the government created the Shanghai Gold Exchange,
allowing anyone to trade gold on the open market.

They also
set up a special precious metals department at the Industrial and
Commercial Bank of China to handle the expected demand when Chinese
banks sell gold and silver bullion bars to individual investors for the
first time ever.

Now, the government is boosting demand like
never before. According to Chris Vick*, the first foreigner ever to be
certified by a Chinese commodity exchange, gold has become "the hottest
asset on the market, simply because of the government's marketing
efforts."

*Name changed to ensure privacy

And China Daily reports, "The gold rush is reaching a feverish pitch in major cities across China."

Time is of the essence...

Keep
in mind, the gold rush in China is happening incredibly fast – just
like it did in China's oil industry, where investors in Sinopec made
360% in 10 months... investors in PetroChina made 140% in less than a
year... and investors in China National made 102% in five months.

Even more incredible, it's expected that future gold consumption in China will increase at annual rates of at least 20%.

Can you imagine what that will do to the price of gold?

In
short, if you get in alongside the government and take a stake in these
2 companies, it could be one of the easiest, fastest ways to make
hundreds, even thousands of percent gains as the gold price surges.

Let me tell you more about them...

Re: Can China beat the U.S. in Gold Reserves in 10 years?

Melody - I agree with you -  China seems to be making all the right moves right now while all we seem to be doing is putting in more money making printing presses & diluting everything.   Out of panic we might let the Chinese buy us out in so many critical areas including our resources - anything to keep our air balloon afloat.  As Jim Sinclair says - " a society that rewards failure  is ultimately doomed!"  

Biggest Story of 2010 - a strong possibility!

Re: Can China bring about a gold backed Yuan? YES!

Iowatrekker, you idea of a gold backed Yuan may have a lot of merit to it - consider the following article:

Gold, the U.S. Dollar, and the Chinese Yuan Commodities / Gold & Silver 2009
Jul 09, 2009 - 05:42 PM

By: Jennifer_Barry

In
late April, a Chinese sovereign wealth fund, the State Administration
of Foreign Exchange, announced that China had purchased 454 metric tons
of gold over the past six years. Officials indicated that this increase
was accomplished by tapping domestic mine supply and refining scrap
gold. As China reported gold production of 282 t last year, the
reserves have absorbed about 25% of this output since 2003.

China
now has the fifth largest official gold reserve, 1,054 metric tons,
surpassing Switzerland. While this was a 76% jump in gold holdings, the
yellow metal is still only 1.6% of China’s foreign reserves. Just to
reach the global average of 10.5%, China would have to grow its gold
hoard to nearly 7,000 t.
This announcement was a huge coup for
the Gold Anti-Trust Action Committee (GATA), which has reported since
2003 that China was surreptitiously buying large tranches of gold.
Contrary to the official communication, GATA’s intelligence indicates
that China’s purchases were made on the open market through
intermediaries in New Zealand and Australia. Ellison Chu, director of
precious metals at Standard Bank in Hong Kong, backs the GATA theory
that

China
has obtained foreign gold, stating that "China has been buying via
government channels from South Africa, Russia and South America." I
would be astonished if China hadn’t purchased significantly more than
400 metric tons, and are continuing to carefully accumulate every time
the price is slammed by the Gold Cartel.  Notably, none of the
mainstream gold analysts accounted for this huge Chinese demand, nor
have they acknowledged they were totally wrong about their supply
numbers.

Why Announce It?

China
reported six years of purchases at once, but why admit to buying gold
at all? Officials stated they were contemplating raising the nation’s
gold reserve to 4000 t back in November, which was clearly a hint as to
their intentions. However, the Chinese were unchallenged about their
static claim of 600 metric tons of gold, so there was no external
impetus for them to disclose their activity in the metals market. In
fact, the gold price rose sharply after  the announcement, making any
purchases in May and June much more expensive.

I
believe this gold news was a “shot across the bow” to warn about the
irresponsible speed at which the Federal Reserve is debasing the U.S.
dollar. While I believe that China holds much less of its reserves in
dollars than is generally assumed, the Chinese government does not
appreciate the attempt to dilute the nation’s Treasuries to near
worthlessness. This dovetails with a suggestion by both China and India
that the IMF sell its 3217 t of gold to help poor countries, implying
they want to buy it all. Even if China purchased the whole lot, it
would cost $103 billion at $1000 per ounce, just 5.25% of the country’s
reported forex reserves. The IMF may finally carry out its threat to
“sell” 403.3 metric tons of gold, but this is likely just accounting
for the central bank reserves that have already been leased
clandestinely and moved East into strong hands.

China’s
announcement is very bullish for gold, as it will encourage other
central banks to buy in addition to those already doing so like Russia
and Venezuela. With the legitimacy bestowed on gold as a monetary
asset, and the justified criticism of Britain’s gold sales in 1999,
many nations will follow Germany’s lead and refuse to sell more gold.
Large private investors as well as other sovereign wealth funds are
likely to copy the Chinese. In fact, trader John Paulson’s giant hedge
fund is heavily weighted in GLD, which purports to hold real metal.  As
fiat currency loses the confidence of the public, the “barbarous relic”
will become the money of choice.

Golden Yuan?

China’s
increase in gold reserves has another more profound implication that
most commentators haven’t realized. It’s clear to me that China has
plans to replace the U.S. dollar as a reserve currency with an at least
partially gold-backed yuan. I have to give Jim Sinclair credit, as he
predicted the Chinese were moving to a gold-backed yuan in 2002 as part
of their “long term plan of Economic Ascendancy.” He deduced that the
Chinese government allowed the private ownership and sale of gold by
their citizens in order to re-monetize gold. China has experienced the
folly of paper money many times before and - as Mr. Sinclair puts it -
“their memory is culturally infinite.” The Chinese are aware they must
step in to facilitate the move back to hard money.

China is
doing little to hide its intentions. Chinese officials have long
complained about the excesses allowed by the dominance of the USD, and
have recently called for the use of Special Drawing Rights to settle
trades. In April, the Chinese completed currency swaps with many
countries including Indonesia, Malaysia, South Korea and Argentina for
use in bilateral trade, avoiding the USD. The BRIC countries (Brazil,
Russia, India, and China) just discussed a "supranational" currency to
reduce dependence on the U.S. dollar at a summit in June, and American
officials were not permitted to attend.
However, to have a true
reserve currency, China would need to allow full convertibility. The
Chinese government would need to loosen the trading band which manages
the yuan-U.S. dollar exchange rate. The yuan has gained more than 6%
since the dollar peg was eliminated in July 2005, but the currency is
sure to rise sharply if permitted as it’s clearly undervalued. However,
the central bank will be reluctant to let the currency float freely
with exports down sharply.

Nevertheless,
China is now selling yuan-denominated bonds domestically as an
intermediate step, and allowing some import and export contracts to be
settled in yuan for the first time. To ease out of supporting the
dollar by suppressing the yuan, China’s central bank is transitioning
toward shorter term Treasuries to increase its flexibility. Zhang
Guangping, vice head of the Shanghai branch of the China Banking
Regulatory Commission, has mentioned plans to transform Shanghai into a
financial center to rival New York and London by 2020. This would
clearly require a floating currency with a much higher relative value.

Of
course, China will make sure the transition leaves it as the world
leader for the 21st century. Even with only 5% of forex reserves in
gold, the yuan would be a serious contender for reserve currency
status. The European nations have sold much of their gold since 1990,
and the U.S. hasn’t allowed an audit of its alleged 8,136 tons of metal
since the 1950s. With the additional assets of commodity stockpiles and
the dominant manufacturing economy, China is going for all the marbles.
History has shown that the dominant country has the dominant currency,
from the Romans through the British Empire.

Paper currencies
are backed by faith and confidence in the nations that issue them. As
the Federal Reserve prints the dollar to worthlessness with its
“quantitative easing,” governments will increasingly question why they
hold paper promises that are rapidly losing their value. They will look
for a market big enough to diversify into. With over 1.3 billion
potential consumers, China is certainly large enough. While I believe
many countries will follow the Chinese lead and will secure strategic
commodities like oil and copper, it would make sense to acquire the
yuan if this was a viable option. For many nations across the globe,
China is their largest trading partner. It’s inconvenient and adds
expense to acquire USD when not even purchasing goods from America.

Once
the yuan has gained the status of pre-eminent global currency, China
will have many advantages currently enjoyed by the U.S. dollar. Even
when not conducting business with China, countries will use yuan. The
Arab states will accept yuan in exchange for oil, and demand for this
essential fuel will keep the currency strong. Commodities like wheat
will be priced in yuan per kilo, not dollars per bushel. Once China
improves the transparency and governance of its banking centers,
capital will migrate from the West to the East. Nations will accumulate
the Chinese equivalent of U.S. Treasuries.

For those who
doubt this outcome, I want to stress that China’s ascendancy will not
occur overnight. It will take a few decades as China rises and the
American star fades. However, few British citizens envisioned the end
of their Empire at the dawn of the first World War, even though their
nation would soon be eclipsed by their former colony, the United
States. Paradigm shifts only seem obvious in hindsight. Change moves
slowly until the end, when the poles seem to shift overnight.          

by Jennifer Barry

Global Asset Strategist

http://www.globalassetstrategist.com

Copyright 2009 Jennifer Barry

Re: Can China beat the U.S. in Gold Reserves in 10 years?

Gold2008 - I too foresee gold going to $5,000 regardless of what happens on the world stage.  No one wants to blame the ingenuity of the American Workers - they are mostly innocent victims in this process & still maintain resilient qualities.   Rather it is some politicains & Wall St who should bear  more blame &  shame. 

I started a new Blog re "Where is the Shame  & Why no Outrage?"  Maybe we should explore this further as well?

Re: Can China beat the U.S. in Gold Reserves in 10 years?

Iowatrukker, I love your line of thinking & we are obviously on the same page.   My brother's best friend of nearly 50 yrs is oriental & like a true brother.   I have an employee who is part Chinese & I cherish her like one of my 2 daughters - in fact same age as my youngest daughter -  beautiful inside & out - dedicated, intelligent, gracious & willing to learn - in a word -  "PERFECT."

    The Eastern Mindset is so different from ours -  they have definite, realistic  goals & keep their eye focussed on the light at the end of the tunnel.   One wonders just how many  U.S. & worldwide  firms & assets they will eventually swallow up???

If Gold is used to back the Yuan, the possibilities are endless & mind boggling.   As they rise, the U.S. sinks - alas!   I predict their accumulation of Gold will acceleratein 2010 to this end -  "Gold-backed Yuan"

Re: Can China beat the U.S. in Gold Reserves in 10 years?

Here is another article confirming China's Goal to reach 10,000 tons of Gold in their reserves by 2020!

Friday, December 18, 2009

World's Largest Gold Reserves - Article

On
September 18, 2009, the IMF's executive board approved gold sales
strictly limited to 403.3 metric tonnes, representing one eighth of its
total holdings, in a bid to increase the (Washington-based) financial
institution's capacity to lend to poor nations.

The
International Monetary Fund has sold 200 metric tonnes of gold to the
Reserve Bank of India for about $6.7 billion. This new purchase puts
India gold reserves in the 11th spot among the world's leading gold
owners.

Subsequently IMF sold 10 tonnes to Srilanka and 2 tonnes to Mauritius.

Worlds Largest Gold Reserves:

1. US – 8133.5 tonnes

2. Germany – 3408.3 tonnes

3. IMF – 3005.3 tonnes

4. Italy – 2451.8 tonnes

5. France – 2445 tonnes

6. China – 1054 tonnes

7. Switzerland – 1040 tonnes

8. Japan – 765.2 tonnes

9. Russia – 639.8 tonnes

10. Netherlands – 612.5 tonnes

11. India – 557.7 tonnes

Most
countries including India and China—the two largest gold consuming
nations in the world—have US dollar as most part of their foreign
exchange reserves kitty. Now, China, India and other countries want to
move away from dollar to gold, for all perceive gold as a stable
currency than a hot commodity.

Top Buyers of Gold:

1. India

2. China

3. US

Top Producers of Gold:

1. China

2. Australia

3. US

Difference between India and China:

The
most aggressive player in the gold reserves game these days is, of
course, China. Though China is not keen to buy gold from IMF at the
high price that gold is ruling these days, the People’s Bank of China
is stepping up efforts to build up gold reserves by buying the yellow
metal from the market and taking various initiatives to increase gold
mining across the country. China has targeted to mop up a whopping
10,000 tonnes of gold reserves by 2020.

At the recent Elections in India (April-May 2009) you have Noticed/heard the lines saying that “China Buys Gold, India Buys Votes”.

The
Indian politicians spent an estimated Rs 10,000 crore to buy the votes.
China, meanwhile, has just announced that it has bought gold of 454
tonnes.

China
is tired of owning US government debt which may be worthless pieces of
paper. So China is busy buying all kinds of real, hard assets. They are
buying iron ore mines; copper mines; and rumour has it they are keen to
buy agricultural land, but not so that they can bribe someone and have
it converted to build an SEZ(Special Economic Zones were started/founded in China in early 1980’s and the most successful SEZ in China is ‘Shenzhen’ has developed from a small village into a city with a population over 10 million within 20 years). And China is buying more military equipment, too.And now they are gobbling up gold. 

India
is the “Land for Rising SON’s” that means…Take for an example our
Indian Prime Ministers…Jawaharlal Nehru, Indira Gandhi, Rajiv Gandhi
and Now Rahul Gandhi. Indian Politicians( major) thinking will be on
who will become the next Prime Minister and when the next elections
will be held and to tie-up which party during elections and more over
politicians contesting in elections for their self benefit.

In India, only 44% villages have power. On the other hand, 99% of China’s villages are powered.

Examples where India is lagging:

Olympics in 2008:

China
got 51 gold medals 21 Silver and 28 Bronze medals. Whereas India got
1Gold Medal and 2 bronze Medals and No Silver Medal. If India had
spended (money) atleast 10% - 15% in Sports what they have used during
elections India have won many medals.

Black Money:

Is
India is Poor? Who says go and ask/verify Swiss Bank personal accounts.
Indian Black Money in Swiss Banks currently/approximately holds $1456
billion or $1.4 trillion (converting into Indian Rupees = 7200000000000/- in words 72 lakh Crores when 1$=50 Rs)
as on Swiss Banking Association Report 2006(Now it has crossed even
more.) an amount 13 times larger than the country's foreign debt. With this amount 45 crore poor people in India can get Rs 1,00,000 each. 

Next place goes to Russia - $470 billion, UK - $390 billion, Ukraine - $100 billion, and China - $96 billion.

India recently asked the Swiss Government to reveal the Indian Accounts held in Swiss Banks.
But the Swiss Government has snubbed India by throwing its weight
behind the practice of 'protecting the privacy of clients' at its
banks. 

Coming to Defence:

Active Military Troops in China: 2,225,000 Active Military Troops in India: 1,414,000.

Military Spending by country in 2008-09:

1. US - $607 billions

2. China – $85 billions

.

.

10. India - $30 billion

I
am not comparing with US. Because US is already a developed country.
But both China & India are developing countries. But China is
growing more fast than India that it may surpass Japan to become the
second largest economy in the world in the coming few (2 or 3) years
according to financial experts whereas India will become third largest
economy by 2050. Still 40 years to go. China already 3rd largest economy in the world(2009).

We have got Independence before China. India got Independence in Aug 15th, 1947. China got in Oct 1st, 1949.

Don’t think that I am against/blaming India. I am also an Indian. But need my Country to improve a lot. No
Doubt India is the Worlds Largest Democracy in the world when compared
to no other country in the world until China leaves Communism.

: 
 

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Re: Can China beat the U.S. in Gold Reserves in 10 years?

China suddenly #1 Gold Producer in the World -  dummies they are not,  I agree with Iowatrukker,  China has a plan - perhaps it's time for us to remove our blindfolds!

Gold production rises in China, Russia, Australia

November 29, 2009 20:20:00 IST

By David Lew
Gold
price is surging. But what about gold production? Which countries are
stepping up gold production? One reason for the soaring yellow metal
prices is shortage of gold supply thanks to rising mining costs.

But
despite the rising costs, countries are vying with each other to step
up gold production. Three countries that are doing well in gold
production are China, Australia and Russia.

On Sunday, the
China Gold Association said that China will achieve record production
in gold in 2009. It said China’s gold production for the current year
will jump by over 10 per cent to touch 310 metric tones, compared with
the 282 tonnes that the country production last year. China is
currently the largest gold producer in the world.

Australia has emerged as the second largest gold producer this year.

A
survey of local industry output in the September quarter by Surbiton
Associates, released yesterday, found that production was near steady
for the period at 56 tonnes (1.8 million ounces). That continued the
run rate that saw production in the June half weigh in at 112 tonnes of
gold.

Surbiton director Sandra Close said the past few years
had seen a shift in the rankings of the world's biggest gold-producing
countries. South Africa dominated global rankings for close to a
century but has now slipped to fourth position.

''In 2005,
Australia was the world's second-largest gold producer behind South
Africa but it was overtaken by the US in 2006 and by China in 2007,
putting it back to fourth place,'' Dr Close said.

''But with the
continued decline in South African output and lower production in the
US in the first half of 2009, Australia has regained the No. 2 spot.''

What about Russia gold production?

RUSSIAN
gold production rose 12.2 per cent year-on-year in the first 10 months
of 2009, mainly due to the launch of large projects in its far east,
the Russian Gold Industrialists' Union said on Friday.

The
union, which is the main industry lobby, said in a statement gold
output by the world's No. 5 miner of the precious metal totalled 171.2
tonnes in January-October compared with 152.5 tonnes in the same period
a year ago.

October gold output from mines and placers
declined by nearly 4.17 tonnes from the same month a year ago, but a
rise of volumes refined as a by-product of other metals cut the total
decline to 1.87 tonnes.

Re: Can China beat the U.S. in Gold Reserves in 10 years?

Notice this past year how China is suddenly increasing their interest in gold.   WHY?  Is it part of their Master Plan to protect themselves & their own currency?   They no longer wish to be low man on the totem pole - no quite the reverse!                                                    Central banks keen to stock up on gold

European Central Bank cuts annual metal sale.

Suresh P. Iyengar
Mumbai, Dec. 25
The European Central Bank
(ECB) decision to downsize its
annual gold sale in 2009 to 155
tonnes is expected to further
boost yellow metal prices in
2010. The ECB has sold 400-
500 tonnes annually the last 10
years.
Of late, there is a tendency
among central banks of many
countries to hold a major portion
of their reserves in gold.
The emergence of new net
buyers is expected to add
strength to the bullish trend in
the metal. China had acquired
450 tonnes, India 200 tonnes
and Russia 120 tonnes from
the International Monetary
Fund this year.
The US government holds
8,133 tonnes of gold, the Euro
Zone 10,800 tonnes and the
IMF about 3,000 tonnes. Governments
across the world
own close to 30,000 tonnes.
Mr Ajay Mitra, Managing
Director (India), World Gold
Council (WGC), said that gold
is more relevant as an asset going
into 2010. Increasing signs
of recovery have heightened
inflation concerns suggesting a
favourable environment for investment
demand.
While the ECB has a high
gold reserve, many emerging
economies have very low
stocks or no gold at all. "In aggregate,
Asian countries hold
only 2 per cent of their reserves
in gold. Were the Asian central
banks to increase their holdings
by just one percentage
point, they would need to buy
about 1,000 tonnes. Official
sector activity will be a key
metric to watch in 2010," said
WGC.
Mr Navin Mathur, Associate
Director, Angel Broking, said
though gold prices depend on
the rupee-dollar movement,
gold sales by the central banks
are always keenly watched as
they impact sentiments.
"With the gold price on a
high, jewellery sales are likely
to struggle with the exception
of China, where the outlook remains
cautiously positive,"
said WGC.
In 2009, investment demand
almost made up for the
weakness in jewellery and industrial
demand as investors
bought large quantities of
coins and bars, besides exchange
traded funds and other
products.


Related Stories:
Investor appetite, central bank purchases to buoy gold
The RBI’s tiny pot of gold
RBI buys 200 tonnes of gold from IMF
Purchase of gold will help RBI diversify forex reserves

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