Yahoo! US, in its September 2, 2012 article, reports that China is swapping Gold for U.S. Dollar, Reports Leading Financial Newsletter Profit....
Extract :
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Michael
Lombardi, lead contributor to Profit Confidential, believes that central banks are hungry for gold bullion and that there is
an overwhelming amount of
evidence that suggests gold bullion prices are about to head higher. Lombardi reports that
the demand for gold bullion
from central banks is increasing, particularly in China, as the country, in Lombardi’s opinion, plans to buy
more gold and dump U.S. dollars.
“Central
banks’ appetite for
gold bullion doubled in
the second quarter of 2012,” notes Lombardi. “The central banks bought 157.5 metric tons of gold bullion in
the second quarter.”
In
the article “Actions Speak Louder Than Words:
China Set to Buy More Gold,” Lombardi points
out that central banks,
in general, need to diversify their foreign exchange reserves; however, this means that these
banks are not relying as much on the U.S. dollar.
Instead, Lombardi claims China is increasing its purchase of gold bullion. He notes that gold bullion accounts for 1.6% of China’s $3.2-trillion foreign
exchange reserve, compared
to the international average of about 10.0% of foreign exchange reserves in
gold bullion.
“There
is speculation that China’s central bank is planning to buy at least 5,000 to 6,000 metric tons of gold bullion
over the next two years and it will start purchasing
that gold bullion this year,” says Lombardi.
Lombardi
suggests that the Chinese central bank will be buying
more than a two-year supply of gold bullion produced, if the total gold bullion
production of the mines is 2,602 tons per year.
“In
the first two quarters of
2012, China’s inflow
of gold bullion from Hong
Kong increased six times,” reports Lombardi.
“Imports of gold bullion from
Hong Kong were higher by
65% in April, compared to March.”
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