Gold: a Chinese Symbol of Wealth
by admin ~ February 2nd, 2007 . Filed under: Investing .
The strong demand for gold in China has been embraced by the nation’s banks and other financial institutions. The Bank of China’s Shanghai branch, in November introduced “Gold Treasure”. This has been designed to make it easier for the public to invest in gold. Instead of taking delivery of the gold the investor is given a document issued by the central bank certifying the amount purchased. The investor can sell the gold back to the bank and surrender the certificate.
The population of China is 1.2 Billion and China’s potential demand for gold is 37,000 tonnes A Reuters news report recently announced that Financial News, a newspaper published by Peoples Bank of China, urges an increase in gold reserves to diversify the nations forging exchange holdings. Chinas gold reserves stood at nearly 13 million ounces at the end of September, unchanged from the end of last year, official figures showed this nowhere near compares with the US government reserves of 262 million ounce. The newspaper also said Beijing should allow individuals to freely buy and sell gold and encourage residents to store gold. Until now Chinese residents have only been able to buy gold jewellery through retail stores.
It should be noted that the Chinese have used gold jewellery as a form of saving since time immemorial. “In case of an economic crisis, the state could buy gold form residents and use it to pay back foreign debt” the Financial News said.
China’s impact on gold could be as much as one ounce per capita as with the US, so should china achieve the same financial backing it would require 1.2 Billion ounces of gold or 37,000 tonnes. This is the same amount of gold in deposit today in all the Central Banks in the world. This sort of demand will send the price of gold soaring.
By: Keith McGregor
About the Author:
South African born Keith has lived in the south of England for most of his life. After graduating from University with a degree in Business Information Systems Management he decided to start Strawberrysoup; a website design company based in West Sussex and Dorset.
Keith successfully gained entry into the Southampton University Air Squadron and spent over 12 months training to fly. Since then he has continued to follow his interest in flying and has now began his own training in the form of a Private Pilot’s Licence.
Keith also spent 13 months working within the Image and Printing Group at Hewlett Packard in Bracknell. Throughout his time there, he was responsible for many activities including events organisation and website design and maintenance.
Doreen Cunningham
