Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
History's Worst Stock Market Crash and the Greatest Investing Lesson! - 19th Oct 18
More Signs of a Stocks Bull Market Top and Start of a Bear Market in 2019 - 19th Oct 18
Stock Market Detailed Map Of Expected Price Movement Before The Breakout - 18th Oct 18
Determining the Outlook for Gold Mining Stock - 18th Oct 18
Investor Alert: Is the Trump Agenda in Peril? - 18th Oct 18
Stock Market is Making a Sharp Rally After a Sharp Drop. What’s Next? - 18th Oct 18
Global Warming (Assuming You Believe In It) Does Not Affect Gold - 18th Oct 18
Best Waterproof Compact Camera Olympus Tough TG-5 Review - Unboxing - 18th Oct 18
Silver's Time Is Coming - 17th Oct 18
Stock Market Volatility Breeds Contempt - 17th Oct 18
Gold 7-Year Bear Market Phase Is Over - 17th Oct 18
Gold - A Golden Escape - 17th Oct 18
Tec Stocks Sector Set For A Rebound? - 16th Oct 18
Real Estate Transactions are Becoming Seamless with Blockchain-Powered Data Sets - 16th Oct 18
Important Elements of a Viral Landing Page - 16th Oct 18
Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?! - 16th Oct 18
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18
Fed is Doing More Than Just Raising Rates - 14th Oct 18
Stock Markets Last Cheap Sector - Gold - 14th Oct 18
Next Points for Crude Oil Bears - 13th Oct 18
Stock Market Crash: Time to Buy Stocks? - 12th Oct 18
Sheffield Best Secondary School Clusters for 2018-19 Place Applications - 12th Oct 18
Trump’s Tariffs Echo US Trade Policy That Led to the Great Depression - 12th Oct 18
US Dollar Engulfing Bearish Pattern Warns Of Dollar Weakness - 12th Oct 18
Stock Market Storm Crash, Dow Plunges to Trend Forecast! - 12th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

China Sets Up Gold Bullion Fund For Central Banks

Commodities / Gold and Silver 2015 May 25, 2015 - 03:23 PM GMT

By: GoldCore

Commodities

- China’s new gold fund – 60 countries to develop gold mining projects
- Allow member central banks to have easier access to gold
- Gold to be traded on increasingly important Shanghai Gold Exchange
- Another important step in making yuan reserve currency
- China and Russia challenging U.S. dominance in key Eurasia
- New gold fund shows monetary importance placed on gold by China
- China ensuring supply in event gold flows from West to East end
- Gold’s reemergence as important monetary asset both for individuals and powerful nations


China has announced the establishment of a new international gold fund with over 60 countries as members. The large fund, which expects to raise 100 billion yuan or $16 billion, will develop gold mining projects across the economic region known as the New Silk Road.

President Xi Jinping said earlier this year he hoped annual trade with the countries involved in the increasingly important modern Silk Road would surpass $2.5 trillion in a decade.

According to Xinhua, the official Chinese news agency, the project will facilitate the central banks of member states to acquire gold for their reserves more easily. This may explain the broad support which the project has received in the area.

“About 60 countries have invested in the fund, which will in turn facilitate gold purchase for the central banks of member states to increase their holdings of the precious metal, according to the SGE.”

The project is being overseen by the Shanghai Gold Exchange (SGE) and it is likely that the newly mined gold will be either be traded on the SGE or be sold directly to the PBOC and other central banks.

Xi and Putin during the military parade in Moscow, May 9th, 2015

Shanghai Securities News reported yesterday that two leading gold producers, Shandong Gold Group, the parent of Shandong Gold Mining Co Ltd, and Shaanxi Gold Group will take stakes of 35 percent and 25 percent respectively, with the rest owned by other unnamed financial institutions.

The fund’s activities could take in the launch of gold-backed exchange-traded funds and buying stakes in listed gold companies and mining firms.

The new project marks another step forward in the internationalisation of the Yuan. Xinhua, which tends to represent the views of the Chinese government, quotes a spokesperson from the Industrial Fund Management Co. as saying

“China does not have a big say in gold pricing because it accounts for a small share of international gold trade,”

“Therefore, the Chinese government seeks to increase the influence of RMB in gold pricing by opening the domestic gold market to international investors.”

Coupled with the BRICS bank and the AIIB, China’s power in the region and internationally is strengthening. The China Gold Association is on record as saying that they aim to surpass Germany in the near future as the second largest holder of gold reserves – with 4,000 tonnes of gold. The PBOC’s sights are on the 8,500 tonne mark which is the amount of gold supposedly held by the U.S. – reserves unaudited for half a century.

Separately, the growing trend of western central banks attempting to repatriate their sovereign gold continues. Reports from Austria over the weekend say that the central bank of that country is set to repatriate a sizable proportion of its gold – the bulk of which is in the UK.

Reuters cites an Austrian National Bank report stating “around 80 percent is kept in Britain, 17 percent in Austria and 3 percent in Switzerland.”

Austria’s Krone newspaper claims that under the new plan “50 percent would be kept in Austria, 30 percent in Britain and 20 percent in Switzerland.”

Central banks remain some of the biggest buyers of gold and yet gold buying remains small when compared to the huge foreign exchange reserves built up in the last 20 years.

For 17 consecutive quarters central banks have been net buyers of gold. 2014 saw central banks buying 477.2 tonnes of gold – the second highest volume in 50 years, second only to 2012. Western central banks are seeking to bolster their currencies by securing their gold reserves as the end game of unpayable gargantuan debt approaches.

The new order which is emerging out of Asia is one in which gold will clearly play a central role. The Chinese move may be designed to ensure a supply of gold in the event that a systemic or monetary crisis leads to a cut off in the massive flow of gold bullion from west to east seen in recent years.

Given the tiny size of the physical gold market, the Chinese are aware that there will likely come a time when physical gold bullion may be very hard to acquire – especially in the volumes that have been acquired by China in recent years.

Investors would be wise to pay heed to these important trends and gold’s reemergence as an important monetary asset both for individuals, central banks and powerful nations.

Must Read Bullion Guides below:

Essential Guide to Bullion Storage in Switzerland

Essential Guide to Bullion Storage in Singapore


MARKET UPDATE

Today is a spring bank holiday in the UK and the U.S. is observing Memorial Day.
Friday’s AM LBMA Gold Price was USD 1,211.00, EUR 1,083.45 and GBP 772.96 per ounce.
Gold fell $0.10 to close at $1,204.30 an ounce Friday, and silver slipped $0.08 at $17.03 an ounce. Gold and silver finished down for the week at 1.6 percent and 2.6 percent

Gold in Euros – 1 Week

Overnight, gold in Singapore was down 0.1 percent at $1,204.46 an ounce near the end of day trading. Gold inched lower in dollars and pounds today but was higher in euros. The U.S. dollar gained to a one month high with help from better than expected U.S. consumer prices for April.

Trading will be thin today with low volumes because of the holiday in the U.S. and UK markets.

In a speech to a business group on Friday, Fed Chair Janet Yellen indicated that the U.S. central bank was poised to raise rates this year. Contrary to recent data, she claimed the U.S. was set to bounce back from an early-year slump and headwinds at home and abroad were waning.

Russia and Kazakhstan raised their gold holdings in April as the price of gold steadied, while Jordan entered as a steady buyer earlier this year, data from the IMF showed on Friday.

Russia increased its stocks by 8.333 tonnes to 1,246.625 tonnes in April, the data showed, buying for the second straight month after a pause for just one month this year. Kazakhstan raised its gold holdings by 2.441 tonnes to 200.851 tonnes last month.

Jordan, a small holder of gold reserves, became a buyer in the first quarter of this year, bringing its holdings to 33.28 tonnes in March, after raising them by 3.4 tonnes in January, 8.087 tonnes in February and 2.488 tonnes in March. This marks a 76% increase from the end of 2014.

In late morning European trading gold is off 0.14 percent at $1,203.97 an ounce. Silver is down  0.25 percent at $17.03 an ounce while platinum is up 0.28 percent at $1,146.57 an ounce.

This update can be found on the GoldCore blog here.

Mark O'Byrne

Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules