If Yuan Is Allowed to Rise on U.S Dollar, What Would Happen to Gold Investment?

Julian Philips from the Gold Forecaster wrote that the Chinese government encourages the Chinese citizens to do investments in gold. He also said that the Chinese government wants to expand the varieties of products of gold available in the market.

It is from the Chinese perspective, but what if the government of the United States and other countries has different understanding on the action? They believe that the Chinese government is going to let the currency of Yuan to appreciate. Don’t you think that the Chinese investors are going to be hurt if this thing happens?

It is commonly known that the government of Chinese has at least six years officially added to its reserves of gold. The production of the local gold mining is stay in the country, and it will not leave the country for many years in the future. While the production is not leaving China, the Chinese government develops the new products for gold investment, open the local markets of gold, and support some of the Chinese banks to sell gold in China.

With the fact that the Chinese people hold the littlest amount of gold among Asian people per capita, this breakthrough is of course a significant improvement for the global market of gold. The tendency of savings in the average of Chinese citizens is marvelous. They would save around 40% of their non-reusable income. They save their money in the form of deposits at the banks, with the classy business enterprises into the markets of justice there. But when the turmoil of economic storm arises, these methods can turn into casinos for gambling than a source for investment.

The Chinese people see gold as a true value and security in financial situation. With its 1.4 billion people who are now entering the process of financial empowerment, the potential market for gold-buying in this country is wonderfully great. This will make China one of the most significant investment markets for gold products.

The major limitation on the buying of Chinese gold by government of the individuals is the small size of the global market of gold.  The buying which is constant and long-term is the only means to approach the large amount of gold acquisition. The higher price is also able to wash out the gold sellers. For the sake of the value of gold for investment, we hope that China will stay determined for the predictable future in gold buying.

By Alexandre Laurent

Alexandre Laurentl is working in the jewelry and investment gold since 2002. Alexandre graduated from The Normandy School of Business and from the University of Perpignan a Bachelor of economics in 1995.

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