China & Russia Prepare For Chaos
While the United States remains the largest official holder of gold, with over 8,000 metric tons, China, Russia and a handful of others have demonstrated healthy appetites for the precious metal. In fact, China’s declared acquisitions have ranked it fifth in the world while Russia’s have placed it sixth – four places ahead of India:
– In 2000, China had a mere 395 metric tons, or tonnes, of gold, jumping to 600 in 2002, to 1,054.1 in 2009 and to 1,658.4 in 2015’s third quarter. As of December 2015, according to the World Gold Council, China had 1,708.5 tonnes, more than quadrupling its holdings in a decade, with additional reserves suspected.
– Similarly, Russia’s gold holdings averaged below 400 tonnes until 2006’s last quarter, when the federation began adding an average 28.5 tonnes per quarter; acquisitions ranged from a modest 5.5 tonnes in 2014 to an impressive 77.2 in 2015’s third quarter. World Gold Council figures for December 2015 credit the Bear with 1,370.6 tonnes – at least a 70-percent increase over a decade.
The CENTRAL BANKS of China and Russia are buying gold as a 'safe haven' according to analysts, growing their bullion reserves to defend against the worsening financial and economic outlook.
The recent gold sales by Venezuela also demonstrate the metal's value in a crisis, analysts agree, as the former world No.13 central-bank holder raises cash by selling bullion, dropping to No.20.
China and Russia's move to buy gold is led by "growing fears over global economic growth and grave concern over the health of emerging market economies," writes analyst Robin Bhar at French investment and bullion market maker Societe Generale, calling it a "key…evident…theme highlight[ing] central banks' view of gold as a safe haven asset."
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"[Amongst] emerging market economies," agrees a note from specialist analysts Thomson Reuters GFMS, also pointing to China, Russia and Venezuela, "gold's nature as a safe haven asset is growing in importance."
The world's No.1 gold mining producer since 2007, China has seen the People's Bank buy gold at the fastest pace amongst all official holders since 2009. Adding a further 46 tonnes in 2016 to reach 1,808 tonnes by end April, it then paused in May – the first time since at least May 2015.
World No.3 miner Russia has meantime bought a further 62 tonnes so far this year, taking its central-bank reserves to 1,476 tonnes of bullion and keeping its No.6 spot amongst national holders, one place behind China.
"The slide in crude oil prices," says Bhar, "coupled with the implementation of Western sanctions [over Ukraine and Crimea] has seen the Rouble weaken by almost 50% in two years, forcing the central bank to act…[and] diversify its assets away from the US Dollar and into gold."
Moscow's January-April gold buying was only just behind the country's total gold mine output of 67 tonnes over the same period, itself some 7% higher year-on-year according to the Finance Ministry.
Beijing's total foreign currency reserves shrank in May near $3 trillion, still the world's largest but down by almost a quarter from the 2015 peak.
Like Russia's move to buy gold, China's accumulation "can [also] partially be attributed to China’s desire to diversify assets in light of Yuan depreciation," the SocGen report concludes.
In contrast to China and Russia "building up their gold holdings as a form of economic protection," says GFMS, "Venezuela reduced its holdings in order to create liquidity [but] despite the divergence…central banks are being forced into action" in the bullion market.
For individuals interested in high-risk-high-return speculation, futures contracts specify a price for a delivery of gold on a set date. Long and short positions – buying and selling – can offer leverage on the exchange with less investment capital needed than purchasing physical gold outright. However, trading futures relies on perfect timing, and fees can exceed returns.
The commodity of gold is riven with sentiment and financial insecurity. Experienced professionals recommend diversifying portfolios with gold or precious metals but limiting allocations to 5-10 percent.
Rewards can be amazing – like 2010’s 27-percent increase – or heartbreaking – like 2013’s 28-percent price drop followed by 2 years of sinking values. So far, 2016 shows a respectable increase in gold prices, but when interest rates rise, gold values tend to drop. In contrast, political or economic instability raises gold’s price. Charts detailing gold peaks and lows for investment choices confirm only that nothing remains the same.
Whether you’re a gold bug, a high-risk trader or a careful investor, only you can determine how much influence gold-acquiring nations will have on your investment strategies, and only time will reveal the results.
THE WORLD WILL RETURN TO GOLD
International man Doug Casey from Casey Research joins me to discuss the sorry state of our completely corrupt government and how the mainstream media is colluding to prop up Hillary Clinton. We also discuss the recent mining stocks correction – and gold, which Doug says the world will return to after the coming collapse., a collapse which will be so brutal that Americans may soon find themselves living like Venezuelans are now.
"This is a quiet attack on the almighty dollar. Russian President Putin buys a lot of gold without attracting much attention to it. As long as political circles fear a new cold war between Moscow and the West, this war has already erupted in the financial sector," Germany's Die Welt wrote.
According to German economists, Putin is trying to undermine the power of the United State and Europe. Those who buy gold stand in the way for Western currencies in their global domination. This is a part of Putin's plan for world domination, economists say.
Noteworthy, Want China Times reported with reference to Duowei News that China's enormous gold reserves may crush the US currency." The publications also said that Russia had doubled its gold reserves since 2005.
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US dollar may soon collapse as world reserve currency
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