China Mineral Company continues to report on China’s influence on the global gold and other financial markets. China has convinced the world effectively that it has the financial muscle to control the global gold price. A report that China is taking gold into its official reserves to counteract dollar decline is sufficient to stabilize the gold price, at minimum.
Should China wish to de-stabilize the dollar by announcing big gold purchases into its reserves that would replace a good proportion of its trillions of dollars, there is little doubt that it could do so. However, China is still very dependent on export markets, so the country must continue to move cautiously.
China continues to push investment in gold as a good bet for investors. As a result China is likely to surpass India as the world’s biggest precious metals purchaser this year. This move also lends support to the country’s domestic gold mining industry – China is currently the world’s largest gold producer. Chinese domestic gold purchases rose 14% in the first half of the year and industry analysts expect double digit growth to continue in the current half year, even with gold at over $1,000.
