Chinese buy gold slowly to avoid huge price spike

19-Nov-2010 An insider has revealed that China is planning to slowly increase its gold reserves over the coming years so as to avoid creating a sudden spike in prices. If you were sitting on that many US dollars and the guys with printing presses were running riot, I very much suspect that you would do the same thing.

According to the The daily 21st Century Business Herald “a person providing consulting services to the Chinese government” says the Middle Kingdom is planning accumulate gradually, so as not to drive up the price simply through its own buying.

This is significant to gold investors like you and I. the gold market is incredibly small. If all the gold ever refined were bought together it would only make a cube 20m x 20m x 20m. Having an economic power like China behind our investment certainly gives us the confidence to know we are putting our money in the right place.

China is currently the fifth-largest gold holder among world governments, but that amounts to a mere 1.6% of its foreign exchange reserves.

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