China Gold Fund.
The Shanghai Gold Exchange Leads Fund to Help Central Banks Buy Gold.
The Shanghai Gold Exchange and about sixty countries along the Silk Road Economic Belt will raise about $16 Billion for a gold based fund.
The Shanghai Gold Exchange led fund will also invest in gold mining projects along the silk road.
“…such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated“ Chinese State Run News Agency in October 2013, referencing the United States.
The silk road will soon lead to gold.
The Rise of China as a Gold Power
The Shanghai Gold Exchange
The Shanghai Gold Exchange has established itself as viable competitor to the gold trading centers in London and Chicago and is one of the cornerstones of China’s de-dollarization/Yuan strengthening initiatives that also includes selling U.S. Treasuries and the creation of the Asian Infrastrucure Investment Bank.
Volume of Gold Delivered on the Shanghai Gold Exchange Through May 15, 2015
The Shanghai Gold Exchange has delivered over 8,800 tons of gold since 2009.
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China and SDRs
China is widely believed to be making a play for its currency, the Yuan or Remnimbi (RMB), to be included in the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) Program later this year. If China fails to gain inclusion in the SDR, its recent initiatives to strengthen its currency and gain greater acceptance of the Yuan may provide a strong alternative to the IMF regime.
The establishment of a Shanghai Gold Exchange Fund buttresses China’s position as a global gold player and economic power.
Chinese Gold Imports
In addition to the vibrant Shanghai Gold Exchange, China is also one of the world’s leading gold importers. Here is a chart showing the volumes of gold traded on the Shanghai Gold Exchange vs. gold imported through Hong Kong.
Shanghai Gold Exchange and Hong Kong gold imports indicate that China is serious about gold.
Chinese Gold Mining Production
China is also the world’s largest gold producer:
China is the world’s largest gold producer with mining production over 400 tons a year.
Today’s announcement indicates that China is serious about playing a greater role in determining the price of gold.
“China does not have a big say in gold pricing because it accounts for a small share of international gold trade,” said Tang Xisheng of the Industrial Fund Management Co. “Therefore, the Chinese government seeks to increase the influence of RMB in gold pricing by opening the domestic gold market to international investors.”
In the Importance of Gold To Nations and Individuals we noted China wrote in its state run news agency on October 13, 2013 about the United States “such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated“.
It seems China is determined to gain more economic autonomy and influence in the global gold market and international trade. The Shanghai Gold Exchange Fund may have a big impact on global gold demand and how the price of gold is deterimined.
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Shanghai Gold Exchange Charts courtesy of Nick Laird.
Silk Road Picture: CanStockPhoto
Further Reading:
De-Dollarization Continues with the Creation of the AIIB
Comex Gold Deliveries vs the Shanghai Gold Exchange
Gold Continues its Journey From West To East
Shanghai Gold Exchange vs Comex Gold Deliveries
Gold ETF Holdings vs the Shanghai Gold Exchange
Shanghai Gold Exchange Volume Week ended May 15, 2015
Gold and Silver Price Manipulation – Suspected
Gold and Silver Price Manipulation – Actual
Gold Reserves by Country – Top Twenty
Gold Moves West to East Part 1
Gold Moves West to East Part 2
Chinese vs. United States Gold Demand
China Hoards its Gold Production
China sets up gold fund as part of Silk Road initiative – media
Shanghai Gold Exchange Withdrawals May 8, 2015
Shanghai Gold Exchange Withdrawals week ended April 17, 2015
Shanghai Gold Exchange Withdrawals week ended April 10, 2015
Shanghai Gold Exchange Withdrawals week ended April 3, 2015
Shanghai Gold Exchange March 27, 2015
Shanghai Gold Exchange Withdrawals for the Week Ended March 20, 2015.
Shanghai Gold Exchange Withdrawals for the Week Ended March 13, 2015
Shanghai Gold Exchange Withdrawals for the Week Ended March 6, 2013
The Shanghai Gold Exchange Delivers 38 Tons of Gold Through the Last Week of February
The Shanghai Gold Exchange Delivers 59 Tons of Gold in the Second Week of February
The Shanghai Gold Exchange Delivers 59 Tons of Gold in the First Week of February
The Shanghai Gold Exchange Delivers 255 Tons of Gold In January
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