Gold market might never be the same again

[Bumble]

I'm sure it's correct to say that China owns a lot more gold than the amount they publish as being in their foreign exchange reserves. For one thing, they may own gold within various institutions and have decided not to classify this as exchange reserves. Also, they have been pursuing a policy of 'storing gold with the people' by encouraging their citizens to buy gold jewelry. One commentator I read recently estimated that 70 to 75% of the gold China acquires is turned into jewelry and sold at retail. This would help explain the huge mismatch between the amount China buys and mines, and the amount of foreign exchange reserves. But China still needs to have official reserves on a par with those of the USA: until those official numbers reach 4000+ tonnes, I don't see China making any move to challenge the hegemony of the dollar. A more modest, but more plausible, aim is for the yuan to become the currency of choice for trade, especially within Asia. This photo, snapped in Thailand, indicates that intention.

[4Nines7Hills]

If I was China I would keep as much of my gold away from foreign exchange reserves until i was in a position to complete with USA.  Then one day bam 5000 oz, leaving everyone thinking wtf happenen there.

 

The best strategy to achieve anything is not to let anyone what you are don't until its too late for anyone  to do anything about it.

[goldbones]

On 4/24/2016 at 22:18, pho said:

Eh, I don't know about that. If the dollar fails, China loses its export market

The dollar would be the last to fall, it is the current leader but it could get knocked to second place.

What you will see is more emerging markets failing, Venezuela is going through hyperinflation now and it wont be the last i assure you, these currency wars are breaking currencies from the ground upwards rather than top down. 

[goldbones]

On 4/24/2016 at 21:46, HighlandTiger said:

I'm off to find the tin foil, I'm sure the sky is falling, and the reptiles are about to take over the world.............

 

 

 

The sky wont fall overnight. Individuals are like ninjas we move around fast with our opinions and money but the market as a whole is like an Elephant with a bad knee.

[Murph]

On 25 April 2016 at 10:32, vand said:

China probably holds a lot more gold than most people think. Don't forget that China is the largest producer of gold, but it never leaves the country and they don't report it as a part of their global reserves. The 1700 tonnes often reported is just what it has bought from other countries in the last couple of decades.

People are sayin that things won't change overnight.. maybe this is true but they will change, perhaps faster than the established players would care to admit. For example, look at how fast something like Betfair has sprung up to become a global player in the last decade, completely changing the market for online sports betting, so now instead of betting through a bookie, you can do it directly at the exchange and act as a bookmaker yourself. If the idea is a good one, in today's world it tends to grow and spread like wildfire.

Online companies can grow quickly compared to traditional since they don't have to build a physical infrastructure.  Not that Betfair is as big as the likes of W. Hill's and I don't know if I'd consider them as having great ideas.  Moving their base abroad, negating bets after wins and taxing winners at increasingly higher rates.  The anonymity of a cash bet in a bricks and mortar betting shop is much more attractive to me.  Not that I place bets anymore.

I don't think China will want to rock the boat too much or too quickly as they still rely on the West to buy most of their goods or use their manufacturing.  I think they're much more likely to slowly change their role/position.