In a prior post: China Gold demand to likely surpass India in 3-4 years, I speculated:
"China still has the gold bug. Here's an article confirming the widely held view that China is accumulating gold in a manner that does not upset the markets. It is buying from internal production (its own mines), and it has been encouraging its people to buy gold. I call it the unspoken Chinese "get that gold within our borders and we'll figure it out later" gold policy.Well, from Bloomberg today, emphasis mine:
China’s gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year as concern about rising inflation increased its appeal as a store of value, said the Shanghai Gold Exchange.
Imports have gained to 209 metric tons compared with 45 tons for all of 2009, Shen Xiangrong, chairman of the bourse, told a conference in Shanghai today. The country is the world’s largest producer and second-biggest user.Even the Chinese government is pro-gold accumulation, and is fostering this policy with new rules. The article continues:
China’s plans to relax gold trading rules may boost demand and increase trading volumes on the Shanghai Gold Exchange, the bank said.
Gold imports this year by India have already exceeded 2009 levels as consumers boost jewelry purchases, the World Gold Council said Nov. 17. Imports totaled 624 metric tons by the end of the third quarter, compared with 559 tons in all of 2009, according to the London-based industry group today.
“A possible interest rate hike in China won’t damp Chinese investor interest in gold,” the Shanghai exchange’s Shen said. “Even if China adds 50 basis points, it would still be a negative interest rate environment given inflation is running at more than 4 percent.”Behind the multi trillion paper currency bank and sovereign bailouts, behind the broken price discovery mechanisms affecting markets around the world that are erroneously telling us that all is well, there lies a quiet but giant race to gold. The unavoidable fiat collapse is accelerating, and so too, is the sovereign race to accumulate gold.