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China Says Gold No Longer A Key Investment


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http://uk.finance.yahoo.com/news/china-gold-not-key-to-foreign-currency-investment-afp-e0a61f219bbc.html?x=0

China: gold not key to foreign currency investment
8:47, Wednesday 7 July 2010
Gold will not be a key investment for China's massive foreign exchange reserves, its foreign exchange regulator said Wednesday, noting poor returns from the precious metal in the past 30 years.

Poor returns over the last 30 years? They were not poor but non-existent IA.

So err.... expect China to buy big into gold imminently then.....

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Maybe it needs to sell some of its gold stockpile (or at least cannot afford to buy any more significant amounts) as in a global recession it's selling less of its cheap products to the rest of the world but its announcing a face saving less desperate reason.

Edited by billybong
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So err.... expect China to buy big into gold imminently then.....

On the face of it, given that no smart seller warns the market ahead of time of a major purchase, yes. This would seem to be a good time to buy gold as China is about to do the opposite of what they are suggesting they are about to do.

On the other hand, the Chinese ARE that smart so they may be sending out a "buy signal" and planning to dump their horde while everyone thinks they were fibbing--and they weren't.

Its the old tried and tested double bluff that works a treat every time.

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Another possibility is if some western governments or central banks have built up hoards of gold it's undermining the value a bit perhaps just as a little political tester. They have a wicked sense of humour you know.

Edited by billybong
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