Majestic Gold Corp. V.MJS

China Dumping USD, buying More Gold

[nozzpack]

HK price premium is now $38 US per ounce..

Precious metals are disconnecting from Breakevens. Is this a sign that China is buying more gold? Yes. 

Aside from the now obvious news coming out of Asia that China bought Gold from the market as well as from Russia in recent months, as covered in this space— The report notes smartly that China’s December foreign reserves data showed that reserves had remained almost unchanged but that the amount of gold had increased for the second month in a row. Therefore, they are selling more fiat and buying Gold. “The PBOC had bought 1mm troy ounces of gold in December and November, after keeping its gold reserves unchanged for three years.” they note.

One  thing we can add: While the real rate correlation has deteriorated of late, the linkage to the CNH has picked up.

 It stands to reason that given all the events happening centered around China and Gold,there will be a new more populist approach to supporting the Yuan coming soon. The signs are all there including but not limited to the  tighter correlation to the CNH recently

China “Owns Gold Through its People" is a direct quote from a Chinese banking official. What does that even mean?  It means that China has directed its citizens to be buyers of Gold. China is using its companies, exchanges, banks and people as piggy banks for when it needs its Gold.

[Value2020]

With all the this public and private debt, the only real game in town is hard assets like gold, silver etc.  Every country around world is going to try to add Gold to their reserves.  A lot of positives will come our way with respect to Gold prices this year. Just waiting for the market to see the real potential of MJS.