CFD Providers

Top Menu

  • Home
  • About CFD Providers
  • Submit Your Content
  • Contact Us
  • Trading
    • CFD Trading
    • Forex Trading
    • Spread Betting
  • Career
  • Infographic

Main Menu

  • Budget Planning
  • Business News
    • Fundraising
    • Internet Marketing
    • Workplace Environment
  • Finance News
    • Investments
      • Gold Investment
      • Mutual Fund
    • Loans
      • Business Loans
      • Debt
      • Education Loans
  • Insurance
    • Car Insurance
    • Health Insurance
  • Legal Matter
  • Stock Market
  • Transportation
  • Home
  • About CFD Providers
  • Submit Your Content
  • Contact Us
  • Trading
    • CFD Trading
    • Forex Trading
    • Spread Betting
  • Career
  • Infographic

logo

Header Banner

CFD Providers

  • Budget Planning
  • Business News
    • Fundraising
    • Internet Marketing
    • Workplace Environment
  • Finance News
    • Investments
      • Gold Investment
      • Mutual Fund
    • Loans
      • Business Loans
      • Debt
      • Education Loans
  • Insurance
    • Car Insurance
    • Health Insurance
  • Legal Matter
  • Stock Market
  • Transportation
  • The Complete Guide to Getting Through a Lawsuit

  • Jewelry Makes a Great Gift and a Great Investment

  • Why Illinois is a Great Place to Start a Business

  • Top Tips to Advance in Your Career

  • The Best Ways to Invest in your Workforce

Gold Investment
Home›Finance News›Investments›Gold Investment›Why is China Stockpiling Gold Bullion and should you also Invest?

Why is China Stockpiling Gold Bullion and should you also Invest?

By Richard Casteel
January 19, 2016
729
0
Share:

In 2011, 10 grams of gold touched $1921 in the International commodity markets. That is huge considering that it began its upward march from $300 in early 2000’s. At the beginning of 2000’s, many central banks liquidated their gold positions. They had reasons to do so because inflation was going down and holding gold reserves in such period did not make sense.

However, gold marched up smartly, surprising many analysts because that was not expected to happen.

Gold’s value depends upon many things apart from inflation. If interest rates increase, gold prices drop. Likewise, if inflation rises, gold prices rise. Gold also shares an inverse relationship with the dollar. All these rules, however, are not hard and fast rules. Therefore, gold can increase in price even as the dollar is increasing in value.

So what can you expect when economies end up in the grip of recession? Fall in gold’s price of course because recession also means lower interest rate regime. Therefore, gold prices were doomed to fall from their peak in 2011. Spot gold hovered around $1100 in 2015.

Why is China Buying and Holding Golds Reserves?

Volatility and seemingly unpredictability should have kept central banks of most countries away from this commodity. After all, in late 1970’s, gold ceased to be the standard used for determining values of different currencies across the world. In this scenario, gold should have been a touch me not commodity, especially since there are not many applications other than in jewelry industry. However, some countries steadily increased their investment in this commodity, and China is one of them.

The country steadily increased its gold reserves from 395 metric tons earlier to 600 tonnes in 2002. By December 2015, China had managed to increase this holding to 1708.5 metric tons.
For China, one of the primary reasons to invest as a nation is that gold as an asset does give currency some stability from ups and downs in the currency market. After all, there is a fraction of that wealth represented in the currency. In turn, such stability of currency entitles the country for special drawing rights and Chinese Yuan now rubs shoulders with elite currencies such as Japanese Yen, British Pounds Sterling, and the US Dollar because Yuan now exhibits strength of gold holdings behind it.

Other Countries are Stockpiling Too

China is not alone in this pursuit. Russia, Kazakhstan, Jordan, The UAE, and Turkey have all increased their holdings over a period. Going forward,more gold will be accumulated by many nations because of stability in currency price due to gold. After all, the US dollar has been steady for relatively long with the backing of 8000 tons of gold.

Stability in currency has become one of the most acceptable reasons for investing in gold. This commodity is hardly likely to see the low levels of the past. In fact, 20% hike in gold prices by the end year, i.e., end of 2016 can safely be anticipated.

So, you can analyze that this prospect makes gold an attractive short-term investment opportunity for you. Moreover, holding on gold investments for a long time will not be harmful too.

How can you invest in Gold?

Investment in gold may be through-

a. Exchange traded funds;
b. Mining investment funds; or
c. Physical gold

Gold Exchange Traded Funds

These are like small units of gold. The bank or authorized financial body buys gold in bulk quantities. Its value is then divided into units, and these units are sold to applicants at a premium. Gold is then deposited at thegold council. The buyer can choose to sell the units on stock exchanges, or ask the issuing authority to pay up the gold those instruments represent.

Gold Mining Investment Funds

These funds are like shares in gold mining or exploration business.

Physical Gold

Gold jewelry, sovereigns, gold bars come under this category.

If you are an investor,you should wait and watch what impact these gold stockpiling nations will make on the commodity market, and it is better to diversify your portfolio by investing in the various options.

Tagsgold investment market
Previous Article

How Best to Deal with an IRS ...

Next Article

Tips For Choosing The Right Company And ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Richard Casteel

Richard is the chief author of this blog. He worked as a financial advisor in money market form last 10 yrs. His financial sense in Share trading and any other trading is just outstanding. He just shares his knowledge and experience through this blog. You can contact him directly though CFD-Providers.com.

Related articles More from author

  • Gold Investment

    Investing on Gold is Really a Bad Choice Now?

    October 1, 2013
    By Belinda Broido
  • Gold Investment

    Why Your Small Business Should Invest in Gold

    November 18, 2015
    By Richard Casteel
  • Gold Investment

    Learn the Basics of Gold Investing- The Precious Investment

    March 1, 2018
    By Richard Casteel
  • Gold Investment

    Know the Benefits of Gold Investing

    February 27, 2018
    By Richard Casteel
  • Gold Investment

    Is Investing In Gold Is a Smart Idea for Your Retirement Plans

    October 1, 2013
    By Belinda Broido
  • Gold Investment

    Investment in Gold: Important things you need to Know When Investing in Gold

    February 5, 2018
    By Richard Casteel

You May Also Like

  • Debt

    Here’s How You Can Get Your Companies Debt under Control

  • Business News

    Beginner’s Guide To Branding

  • Business News

    Top Three Questions to Ask Yourself when Raising an Invoice for Your Customers

Follow us

  • 16
    Followers
  • 176
    Followers
  • Subscribe
    RSS Feeds
  • Recent

  • Popular

  • Comments

  • The Complete Guide to Getting Through a Lawsuit

    By Richard Casteel
    February 6, 2019
  • Jewelry Makes a Great Gift and a Great Investment

    By Richard Casteel
    December 25, 2018
  • Why Illinois is a Great Place to Start a Business

    By Richard Casteel
    December 24, 2018
  • Top Tips to Advance in Your Career

    By Richard Casteel
    November 13, 2018
  • The Best Ways to Invest in your Workforce

    By Richard Casteel
    October 19, 2018
  • The Complete Guide to Getting Through a Lawsuit

    By Richard Casteel
    February 6, 2019
  • Some Essential CFD Trading Tips for Beginners

    By Belinda Broido
    September 27, 2013
  • Things You Need to Remember before Choosing Any CFD Broker

    By Richard Casteel
    October 1, 2013
  • Few Essential Things to Remember Before Investing In the Stock Market

    By Richard Casteel
    October 1, 2013
  • Is Investing In Gold Is a Smart Idea for Your Retirement Plans

    By Belinda Broido
    October 1, 2013

Subscribe Our Daily Newsletter

Sign up to receive email updates and to hear what's going on with our magazine!

Random Reading

Fundraising

Seven Steps to Your Fundraising Achievement

Fundraising has turned into a fundamental component to schools, scouts, dons and cheerleading groups, youth sports associations, and other group bunches in both residential communities and major urban territories. The ...
  • Advantages of Getting Payday Cash Loans for Unexpected Financial Crisis

    By Richard Casteel
    July 14, 2015
  • Information On Financial Spread Betting

    By Richard Casteel
    August 29, 2016
  • Things You Shouldn’t Do When Marketing Your Business Online

    By Richard Casteel
    July 8, 2015
  • Outsourcing Your Brand

    By Richard Casteel
    January 28, 2015

Blog Timeline

  • February 6, 2019

    The Complete Guide to Getting Through a Lawsuit

  • December 25, 2018

    Jewelry Makes a Great Gift and a Great Investment

  • December 24, 2018

    Why Illinois is a Great Place to Start a Business

  • November 13, 2018

    Top Tips to Advance in Your Career

  • October 19, 2018

    The Best Ways to Invest in your Workforce

Categories

Archives

Most Discussed Stories

  • Legal Matter

    The Complete Guide to Getting Through a Lawsuit

    By Richard Casteel
    February 6, 2019
  • CFD Trading

    Some Essential CFD Trading Tips for Beginners

    By Belinda Broido
    September 27, 2013
  • CFD Trading

    Things You Need to Remember before Choosing Any CFD Broker

    By Richard Casteel
    October 1, 2013
Copyright © CFD Providers. All rights reserved.