End-of-the-week top gold news
Friday, 29-May-2015
(Xinhua) China sets up largest gold fund “A gold sector fund involving countries along the ancient Silk Road has been set up in northwest China’s Xi’an City during an ongoing forum on investment and trade this weekend. The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan (16.1 billion U.S. Dollars) in three phases.”
Note: China continues to move aggressively in an effort to gain sway over the all-important gold market.
Mark Magnier and William Kazer (Wall Street Journal) IMF Official Says Chinese Yuan No Longer Undervalued “China’s currency is no longer undervalued given recent appreciation, but the government should pick up the pace in loosening controls on the exchange rate, a senior International Monetary Fund official said Tuesday. . . The IMF welcomes China’s bid to have the yuan included in the SDR basket, Mr. Lipton said. The IMF is expected to make an evaluation of the composition of the SDR this year.”
Note: China continues to move relentlessly toward officially asserting itself as a global economic superpower.
(Reuters) Russia boosting gold holdings as defence against ‘political risks’ – c.bank “Russia is increasing its gold holdings because gold is a reserve asset that is free from legal and political risks, a senior central banker said on Tuesday . . . “The price of it (gold) swings, but on the other hand it is a 100 percent guarantee from legal and political risks.””
Note: Russia too is improving its reserve mix, by continuing to add gold.
Nikos Chrysoloras, Eleni Chrepa & Rebecca Christie (Bloomberg) Greece Likely to Miss May Deal Deadline “Greece is nowhere close to an agreement with the European Commission and International Monetary Fund over the terms of a continued bailout for the country, said the people, who asked not to be identified discussing private negotiations. German Chancellor Angela Merkel and French President Francois Hollande last week set a target to reach a deal by the end of May.”
Note: The latest deadline for Greece is this Sunday. Many “deadlines” have come and gone before this one, but one thing is certain, every tick of the clock brings Greece closer to its day of reckoning.
Kira Brecht (US News & World Report) 3 Ways to Diversify Your Portfolio With Gold “”Returns aren’t too shabby, either. From 2001 through 2014, the annualized return for holding gold bullion was just over 12 percent, according to Peter A. Grant, chief market analyst at USAGOLD, a Denver-based coin and bullion investment firm. . . “Gold is first and foremost money. Money that cannot be printed or debased. It therefore insulates its owner from the negative outcomes historically associated with fiat [paper] currencies,” Grant says.”
Note: A comprehensive piece on gold investments with yours-truly singing the praises of physical metal.
Michelle Martin & Paul Carrel (Reuters) G7 agree in principle on China joining IMF’s major league “Finance chiefs from the Group of Seven industrial nations agreed on Friday that including China’s renminbi in the International Monetary Fund’s currency basket is desirable, but a technical review must be completed first. The inclusion of the renminbi, also known as the yuan, as part of the IMF’s unit of account would mark another stage in China’s rise as a global economic player, requiring the United States to accept a dilution of its power in international finance.”
Note: That “technical review” is likely to include a full accounting of China’s reserve holdings. The world is particularly interested in how much gold the PRC has acquired since they last announced their gold holdings in 2009. Some are suggesting they may have trebled in the last 6-years. And that may be a conservative estimate!
