Chart usGOLD   Chart usSILVER  
 
Food for thought
Life is under no obligation to give us what we expect.
Margaret Mitchell  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1286.84-2.44
Silver 19.46-0.01
Platinum 1418.75-0.95
Palladium 902.259.00
WORLD MARKETS
DOWJONES 170885
NASDAQ 457820
NIKKEI 15425-35
ASX 56253
CAC 40 438115
DAX 94708
HUI 2463
XAU 1021
CURRENCIES (€)
AUS $ 1.4066
CAN $ 1.4284
US $ 1.3138
GBP (£) 0.7916
Sw Fr 1.2062
YEN 136.6890
CURRENCIES ($)
AUS $ 1.0708
CAN $ 1.0873
Euro 0.7612
GBP (£) 0.6025
Sw Fr 0.9181
YEN 104.0410
RATIOS & INDEXES
Gold / Silver66.13
Gold / Oil13.42
Dowjones / Gold13.28
COMMODITIES
Copper 3.150.01
WTI Oil 95.861.31
Nat. Gas 4.080.03
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
In the same category
China May Fight Inflation With Reserve Ratio Move – Bearish for Gold ?
Published : August 30th, 2011
321 words - Reading time : 0 - 1 minutes
( 0 vote, 0/5 ) Print article
 
    Comments    
Tweet

 

 

 

 

Bloomberg News reported this morning that China May Limit Inflation With Reserve-Ratio Move Locking Up $140 Billion.

As I mentioned last night, Liquidity would be the reason that would take gold down with it. A liquidity crisis doesn’t spare any asset class.

More From Bloomberg:

Reserve requirements are being extended to customers’margin deposits, a move that may drain 900 billion yuan ($140 billion) from the banking system over six months, Bank of America Merrill Lynch economist Lu Ting said in an e-mailed note on Aug. 26. Mizuho Securities Asia Ltd. cited similar information. A central bank press official declined to comment.

China has already raised reserve ratios to a record 21.5 percent for the biggest banks to counter the fastest inflation since 2008. London-based Capital Economics Ltd. said that the reported move may mean no further increases this year, after previously anticipating another 1 percentage point gain by the end of December.

“It’s not surprising to see such a move from the Chinese government, as it is facing a big trade surplus and inflation pressure,” said Liu Li-Gang, a Hong Kong-based economist at Australia & New Zealand Banking group Ltd. “The move will further tighten liquidity,’” he said

….

The six largest Chinese banks need to start setting aside cash equal to as much as 21.5 percent of their margin deposits from Sept. 5, and complete reserves within three months, said Shen, citing information obtained from his investor contacts. Smaller banks will be given a requirement of 19.5 percent starting Sept. 15, with a five-month grace period, he said.

My initial lean would be that this is bearish for gold if the reserves are raised through selling of the metal to raise these reserves. Furthermore, if inflation is tamed then gold, seen as a hedge against inflation may suffer. The operative word is MAY because I felt that a correction in gold was overdue anyway. This might simply contributed to it.

 

 

 

Data and Statistics for these countries : Hong Kong | New Zealand | All
Gold and Silver Prices for these countries : Hong Kong | New Zealand | All
Tweet
Rate :Average note :0 (0 vote)View Top rated
Previous article by
Dan Dontrose
All articles by
Dan Dontrose
Next article by
Dan Dontrose
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Dan Dontrose

Dan Dontrose is the editor of The Fundamental View
Dan Dontrose ArchiveWebsite
Most recent articles by Dan Dontrose
1/25/2014
11/1/2013
10/28/2013
10/25/2013
6/7/2013
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer