As Metal Of Kings Reenters Monetary System “China May Have 30,000 Tonnes Of Gold”
As Metal Of Kings Reenters Monetary System “China May Have 30,000 Tonnes Of Gold” from King World News
Apparently “China may have 30,000 tonnes of gold” as gold reenters the global monetary system.
New Monetary System Backed By Gold
April 7 (King World News) – Dr. Stephen Leeb: Over the past several years, especially since early 2016, the gold market has been stuck in a trading range. The price has been low $1,100’s to high $1,300’s – or about a 25 percent range. I admit that I expected more. Call me impatient but do not call me wrong. Over the past several years one event after another have made it utterly clear that we are on a relentless road to a new monetary system backed by gold…
Even the quiet trading range can be seen as masking the seismic, yet largely hidden events, related to gold. The trading range for gold denominated by Chinese yuan is a remarkably low 8 percent since mid-2016. As I have said in previous interviews, gold flat-lining in terms of the yuan hides coming changes while reinforcing a major change which draws ever nearer. Yuan trading in oil and other commodities is trading that is de facto backed by gold in that any party receiving yuan can exchange that yuan for gold. And in those zones where this trading takes place gold can be exported to other countries. The ultra-tight trading range continues to evidence that the yuan is as good as gold.
Central Bank Buying Of Gold Highest Since Nixon
I am not going to take a position on whether these trading ranges are the result of central bank intervention or – at least in the case of the yuan denominated gold – arbitrage. But these ranges start to look a bit suspicious when you consider that central bank buying of gold has reached the highest level since Nixon took us off the gold standard in 1971 at over 650 tonnes, an increase of more than 70% from 2017.
Moreover, for practical purposes that number is likely vastly underestimated as it does not fully reflect China’s gold accumulation. According to figures released by China, the People’s Bank of China (PBOC) accumulated very little gold – about 11 tonnes. However, as I have stated before, credible analysts believe China has been accumulating gold at the rate of about 1,500 or more tonnes a year over at least the past ten years. My feeling until very recently is that the PBOC was deliberately understating its rate of gold accumulation so as not to spark panic buying.
China’s 30,000 Tonne Gold Hoard
I now believe that there may be very little difference between gold held by the PBOC and gold held by China’s large banks. Indeed, if seasoned analysts such as Simon Hunt, who, at Wood Mackenzie, headed one of the world’s top gold analytic teams can be believed, China may have 30,000 tonnes of gold. More than half that gold is likely at major banks and the PBOC. The division between the PBOC and other banks may not be that important. A singularly important sub rosa happening explains why.