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China Approves Fund That Will Invest In Foreign Gold ETFs, Opening Avenue For Millions Of Mainland Investors

Tyler Durden's picture




 

And here is the catalyst: China has approved a fund that will invest in gold exchange-traded funds outside the country, opening the door to mainland China investors who face negative real interest rates on their bank deposits and want to hedge against inflation. Beijing-based Lion Fund Management Co. said they received approval from the China Securities Regulatory Commission on Monday to proceed with the fund. Next stop: gold much higher as the bubble mania is really unleased in such ETFs as GLD, UGL and PHYS.

More from Dow Jones:

Beijing-based Lion Fund Management Co. said they received approval from the China Securities Regulatory Commission on Monday to proceed with the fund.

"Over the longer term it should be another factor to add to gold's support," said Carlos Sanchez, associate director of research with CPM Group in New York.

The move is a step in the development of the financial market in China, the world's second largest gold consumer behind India, and the No. 1 producer of the metal. It comes on the heels of an August move to increase the number of commercial banks allowed to import and export gold, broadening the domestic market beyond the five largest commercial banks.

Chinese gold imports have been climbing as the nation's central bank started to build gold reserves in recent years and domestic interest in gold investment grew. China's gold lobby has long pressured the government to raise its gold holdings.

A first of its kind for mainland China, the fund brings Chinese buying power to an increasingly popular way for participants to invest in gold.

Then again, China may not need to come to the US for this. They may just stay with their own completely fraudulent exchanges, where ETFs will be backed not even by paper gold, but literally by paper:

"I wouldn't be surprised to see China come up with an ETF themselves for gold," Sanchez said.

The investor-led gold buying--which has also sent futures to a record $1,424.30 earlier this month and boosted shares of gold miners--comes as participants are betting gold will hold its value more strongly than other holdings like the U.S. dollar or dollar- based investments.

And so talk of a gold bubble may finally resume. Of course, it will first require that gold complete a NFLX-like move of about 1,000% higher before anyone take such talk seriously (or else NFLX itself may be, gasp, a bubble).

h/t London Dude Trader

 

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Tue, 11/30/2010 - 16:29 | 765421 midtowng
midtowng's picture

http://www.safehaven.com/article/19141/an-imf-announcement-on-the-comple...

At the end of October the I.M.F. had 32.7 tonnes of gold left to be sold. In September they sold 32 tonnes of gold and in October 19.5 tonnes, in the open market. Should they continue selling at the pace of September then we would expect to hear the announcement in December and probably in the first half of December. If they continued the slower pace of selling of October then we will have to wait until January 2011 for the announcement. We believe that this is significant because it will signal the real end of "Official" selling of gold. The signatories of the Central Bank Gold Agreement, with the exception of small deals in coins have not sold for over a year now. With the completion of the I.M.F. sales the annual 400 tonnes of 'official' selling will not be available to the market.

Tue, 11/30/2010 - 16:42 | 765491 Quinvarius
Quinvarius's picture

The IMF has stopped selling because the central banks are going to run gold to the moon to balance out the debts of gold holding countries.  The fix is on.  But it is the opposite of the preious fix.

Tue, 11/30/2010 - 17:01 | 765583 dlmaniac
dlmaniac's picture

I hope they are not rushing to the fraudulent GLD. Send them straight to CRIMEX. We could use some more squeeze to bust the manipulation.

Wed, 12/01/2010 - 03:37 | 767237 Captain Courageous
Captain Courageous's picture

So is the fix of a fix still a fix....???

 

hmmmmmmm.

Tue, 11/30/2010 - 16:30 | 765429 cossack55
cossack55's picture

Do you think the CSRC downloads roundeye, large-breasted women in all kinds of kinky activities all day while at work too?

Tue, 11/30/2010 - 16:30 | 765430 Ragnarok
Ragnarok's picture

No that's what I call expanding your market.

Tue, 11/30/2010 - 16:50 | 765530 MeTarzanUjane
MeTarzanUjane's picture

A direct hit to the USD by a binary drone.

Tue, 11/30/2010 - 17:06 | 765604 Turd Ferguson
Turd Ferguson's picture

More like a direct hit to the Death Star and the Evil Empire.

Wed, 12/01/2010 - 01:08 | 767028 Bob Sponge
Bob Sponge's picture

Can other Chinese PM funds be far behind this gold fund?

Tue, 11/30/2010 - 16:30 | 765432 ThreeTrees
ThreeTrees's picture

If China is a bubble and this just opened the world up to pent-up demand from the Chinese, just what kind of leverage has been applied to these RMB now chasing gold and what will happen to that demand once the Chinese bubble pops and begins to deflate?

Tue, 11/30/2010 - 16:30 | 765435 Raynja
Raynja's picture

Happy holidays with this gift

Tue, 11/30/2010 - 16:35 | 765458 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That rumbling sound is the stomach of Chinese paper chasers.

Tue, 11/30/2010 - 16:37 | 765467 Gubbmint Cheese
Gubbmint Cheese's picture

fook me..

Tue, 11/30/2010 - 16:38 | 765473 OutLookingIn
OutLookingIn's picture

 

 Just what the world needs - another gold ETF paper derivative!

Good! Let the paper flow! Crank it up! Eventually to blow up!

Owning the real physical thing is looking better all the time!

Tue, 11/30/2010 - 17:54 | 765827 chinaguy
chinaguy's picture

Uh huh, & especially one backed by the full faith of the "China Securities Regulatory Commission "  What a disaster in the making .

Heck, I want a 3X of that sucker.

Tue, 11/30/2010 - 16:41 | 765486 redpill
redpill's picture

You can't eat gold, but if desperate enough, you could eat frothy ChiComs

Tue, 11/30/2010 - 16:52 | 765539 Windemup
Windemup's picture

Emmmm. Stir fry.

Tue, 11/30/2010 - 16:43 | 765493 RobotTrader
RobotTrader's picture

So far, the Cartel has successfully capped GLD and NEM gains today to a paltry 1.5%.

Looks like they one the battle again. 

If only NEM traded as successfully as NFLX......

LOL....

Tue, 11/30/2010 - 16:47 | 765516 tmosley
tmosley's picture

They "one" the battle?

What is wrong with you?

Tue, 11/30/2010 - 19:42 | 766278 Arius
Arius's picture

freudian slip - even he can't say "won" and it is just "one" deep inside he knows tomorrow will be different...

TSA aka "The Smart Ass"

Tue, 11/30/2010 - 16:54 | 765549 DarkMath
DarkMath's picture

Robot, you're not allowed to comment on any Gold stories since the price went above 1380...again. Oh and you're not allowed to comment on any Oil stories since the price went above 84...again.

And one other thing you can't vilify Robert Prechter and then agree with him at the same time. You can't have your cake and eat it too.

 

Tue, 11/30/2010 - 19:45 | 766290 Arius
Arius's picture

why not?  Gartman has been making the wrong calls on gold from 300 all the way up to 1300 and he still is on CNBS...robo can at least have an audience here - it gets boring if all agree...you need a punching bag...

Tue, 11/30/2010 - 22:01 | 766592 Kyron95131
Kyron95131's picture

lol

Tue, 11/30/2010 - 22:27 | 766641 dark pools of soros
dark pools of soros's picture

he can if he goes back to posting more boobies

Tue, 11/30/2010 - 17:20 | 765658 tallystick
tallystick's picture

I suppose that's the same definition of success you use trading your own account?

Tue, 11/30/2010 - 16:44 | 765499 cougar_w
cougar_w's picture

This sounds to me like the Chinese trying to divert money out of other bubbles (comm and res real estate) and into a new one (gold paper) just in time for a crash in the former. That puts them about 2 years behind the US in Standard Bubble Time. Note that they can easily destroy hot money in their own economy by nuking gold paper holders at will.

It's a trap.

Tue, 11/30/2010 - 16:49 | 765514 DarkMath
DarkMath's picture

Tyler,

GLD isn't an ETF but a paper vehicle used to suppress the Gold price. You could drive a truck through the custodial agreements. GLD is for chumps. GLD is the only Gold ETF that trades at a discount to the actual Gold price. Why is that? It's because the market doesn't believe it's has unencumbered Gold.

Tue, 11/30/2010 - 16:47 | 765515 Jason T
Jason T's picture

They earned it.  The pay people to work in China, we pay people not to work in America.

Tue, 11/30/2010 - 22:29 | 766649 dark pools of soros
dark pools of soros's picture

as long as americans don't save, they'll still get thier free money..  it is just a wealth transfer from the future to the McDonald's, Gallo Wine, etc companies today...

 

 

Tue, 11/30/2010 - 16:47 | 765517 Temporalist
Temporalist's picture
Why Eric Sprott sees silver as the next big investing windfall

"How high will gold go?

I think gold is the reserve currency today. There is not a currency in the world that it hasn’t appreciated against by at least 300 per cent. And it has beaten every stock market. You can’t even rent a safety deposit box in Germany because they are all full of gold and silver … I am pretty convinced that gold will go a lot higher because it is under-owned as only 1 per cent of people’s money is in it. It could go to $2,000 an ounce. I could imagine it at $5,000. I am not giving a time frame on that, but I could certainly see that happening. But the real story now is silver.

Why are you more bullish on that metal?

Gold has traded at a ratio of 16-to-1 to silver in terms of price, but today it trades in the range of 50 to 1. I think the gold-to-silver ratio is going to go back to 16 to 1 given the passage of time, say three to five years. And I bet you that silver overshoots. The gold-to-silver ratio may even get down to 10 to 1. I believe that the price of silver has been suppressed."

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/why-e...

Tue, 11/30/2010 - 17:30 | 765707 Blindweb
Blindweb's picture

While I am heavily overweighted in silver, I do worry about the price if we have an energy crisis and industrial demand collapses.

Tue, 11/30/2010 - 18:03 | 765883 DosZap
DosZap's picture

60/40 bro............

Gold goes up stairs and comes down the elevator.

Silver goes up the elevator, and falls out a window.

Personally, if your in a price position, I would sell some slvr, and buy Gold.

If your really upside down.Silver(even in this climate ) could drop back to 12-$16, in a nano second.

Gold also (can drop quickly) ,but nowhere near as  volatile as Slvr.

Remember Gold IS Money.(not considered a Commodity by people who know).

Banks do not hold Silver(damn sure should though).

Of course with the globe now running scared, who knows what will happen to its prices.

Tue, 11/30/2010 - 22:35 | 766662 dark pools of soros
dark pools of soros's picture

you might be right..   its around 9 bars of silver for 5 grams of gold..  I might need to convert some or atleast see how the local dealers react to it..

Tue, 11/30/2010 - 16:50 | 765528 Windemup
Windemup's picture

Wait a minute. With 2 billion Chinese, there isn't enough gold to go around. Stop Stop. Don't do it.

Tue, 11/30/2010 - 16:54 | 765548 MeTarzanUjane
MeTarzanUjane's picture

The golden elevator bitchez.

Tue, 11/30/2010 - 16:50 | 765529 ShankyS
ShankyS's picture

As Cramer screams, "sell, sell, sell" which will be followed by a GS lowering of target price.

Tue, 11/30/2010 - 16:50 | 765531 apberusdisvet
apberusdisvet's picture

 

Read this news last night; no mention in MSM but of course no gold bull news is allowed by the propagandists.  Some of you think this is a head fake, but I see it more as an alternative to move people off the soon to pop real estate bubble.

Tue, 11/30/2010 - 16:52 | 765533 MsCreant
MsCreant's picture

The Chinese need a way to bring the price of gold down, too. They sell gold they don't have into the system via paper, and they too can be lying, thieving, cheats, and buy physical gold at depressed prices. If I was right about this, this would be mid-term scroomage on the price of gold.

Tue, 11/30/2010 - 16:57 | 765561 DarkMath
DarkMath's picture

Very good point. China could be doing what we did with GLD: siphon off demand and keep the price down.

Tue, 11/30/2010 - 16:52 | 765544 MarketTruth
MarketTruth's picture

In China investors can literally walk into banks and buy PHYSICAL gold. Not just one or two banks mind you, MANY banks sell physical gold.

Tue, 11/30/2010 - 16:58 | 765565 MeTarzanUjane
MeTarzanUjane's picture

Exlent point. So why the fuck would they buy some American ETF paper promise?

Tue, 11/30/2010 - 17:17 | 765648 Temporalist
Temporalist's picture

Perhaps they'd pump the price up to some ridiculous amount, using worthless dollars, then watch it crash because they can't possibly be holding what they claim.

Tue, 11/30/2010 - 17:23 | 765674 Ace Ventura
Ace Ventura's picture

Don't think they're buying American ETF paper....but rather Chinese ETF paper. No actual difference in what you are actually getting mind you, but it's all about perception these days.

As someone here already posted, this is likely another gold-price-suppression method. China would certainly prefer to keep growing its gold reserves at non-rocketing prices.

Tue, 11/30/2010 - 17:01 | 765569 cougar_w
cougar_w's picture

Or they keep the gold and sell physical tungsten. It's a control state, who would you complain to?

"Yes sir, that is indeed gold-plated tungsten. You are very clever! We will inform your next of kin how very clever you were."

Tue, 11/30/2010 - 17:14 | 765634 SilverRhino
SilverRhino's picture

I'll leave it to the Chinese to be the first ones to develop the gold-tungsten panda bullion round.   Won't take long with all that hot $$ flowing around in there.

 

Tue, 11/30/2010 - 18:06 | 765904 DosZap
DosZap's picture

Newsflash, they already have, not the Panda but other countries.

Tue, 11/30/2010 - 17:28 | 765692 New_Meat
New_Meat's picture

"... We will inform your next of kin how very clever you were."

"Oh, and we have prepared your invoice, please sign here, you will be billed for one bullet."

Tue, 11/30/2010 - 17:42 | 765766 OutLookingIn
OutLookingIn's picture

Not only just banks!

The government have opened small boutique style stores all over China, selling nothing but gold and silver bullion,coins,trinkets, jewellery, etc.

Tue, 11/30/2010 - 19:07 | 766161 Wu Qi Ming
Wu Qi Ming's picture

In China investors can literally walk into banks and buy PHYSICAL gold. Not just one or two banks mind you, MANY banks sell physical gold.

While that's true as well as being numerous Gold shops selling physical bullion too, this is a bit of a no news story to me. For at least 2 years Gold and Silver ETF's have traded at the 4 primary banks (Bank of China, China Construction, Industrial & Commercial and Agricultural Banks). It can all be bought and sold from the comfort of your computer desk with mouse clicks. What's more is that it can be traded in both $US and/ or RMB. Thats been some juicy arbitrage.

Tue, 11/30/2010 - 16:59 | 765571 Guillotines And...
Guillotines And Head Baskets R Us's picture

Today is my birthday! So what! Buy real gold and silver before they stop makin' the stuff out of paper (ETFs).

Tue, 11/30/2010 - 17:05 | 765596 Captain Willard
Captain Willard's picture

Maybe they are trying to drain reserves from the banking system. If money goes from a deposit into a gold ETF, it cannot get recycled into a real-estate loan.

Tue, 11/30/2010 - 17:15 | 765643 tmosley
tmosley's picture

You think they just sit on the dollars/Yuan after they disperse the shares?

Tue, 11/30/2010 - 17:30 | 765709 Captain Willard
Captain Willard's picture

LOL. I assume they buy some ETF shares, but that could be naive.........

Tue, 11/30/2010 - 17:05 | 765600 Bastiat
Bastiat's picture

Who knows what the Chinese are up to?  Maybe they'll take a huge position in SLV and GLD and take delivery of a few hundred "baskets."

Tue, 11/30/2010 - 17:23 | 765676 tallystick
tallystick's picture

My thoughts as well.

Tue, 11/30/2010 - 17:51 | 765812 RECISION
RECISION's picture

Exactly, hold to maturity: take delivery.

They have the cash, they don't need no stink'n margin...

That is just a gimme for them. Buy in at a good rate (almost anything) and then hold to maturity(and delivery). Burn off everyone else who is playing an arb/leverage game.

It is a pure Win/Win/Win for them.

 

Tue, 11/30/2010 - 17:34 | 765726 jmc8888
jmc8888's picture

Chinese Politburo says, hey bernanke, we can export inflation too.  Here's 1.4 billion chinese worth of people capable (and in the mood to) of buying pm's on YOUR markets. 

Still want to print? Because it's going to come back to YOU.

 

Tue, 11/30/2010 - 18:18 | 765973 JimmyTheHand
JimmyTheHand's picture

That's exactly what I was thinking.

Tue, 11/30/2010 - 17:47 | 765794 sgorem
sgorem's picture

Paper is for wiping your ass with. I talked my best friend into selling off his $15,000 in GLD last year. Of course the fricking Uncle Sambo got their unbelieveable capital gains, but it had went up so much that he's sitting on $15,000+(after tax) in 10 gram Pamps now. I think the majority of Chinese will also want to hold the "Precious" in their greasy little hands too. Paper gold is for fools, do the math my friends...........

Tue, 11/30/2010 - 17:56 | 765848 sgorem
sgorem's picture

And furthermore.....Your GLD & SLV are EXCLUSIVELY TAXED differently from ANY other equity, "read my lips", TWENTY EIGHT PERCENT! Sell your GLD or SLV and you will not get gold in the mail, you'll get a bank wire transfer, or check for guess what!? FUCKING DOLLAR BILLS!! Hello? Buy a fricking safe for $6-700 bucks and a 45acp and hold it yourself. jeeeeez.......................

Tue, 11/30/2010 - 18:17 | 765970 DosZap
DosZap's picture

Same with physical if held past 12 mos.Most here are likely well above the 28% range anyway.

Under a year, taxed as regular income(profits).On the .45,

Better get your SEMI's while you can,Obamsters new BATFE director is as anti weapons as they come,and is a Chi Town boy.(need I say more?).

He held off until after the elections to OUT his pick, now we know why.

Wants to BAN all semis, and relabel rounds considered AP.

Bye Bye 50BMG,5.56/M855, likely any CF rifle round.

Tue, 11/30/2010 - 19:12 | 766177 sgorem
sgorem's picture

you are exactly correct. Try S&W 500 mag., 8 3/8 " wheel. A little more expensive rounds but deadly accurate @ 50-75 yards. And of course there are no pieces to rake up afterward. I live in what is probably the most well armed state in the Union for it's size. very secure, conservative, and getting more un-politically correct & radical everyday. Ain't life great.........

Tue, 11/30/2010 - 19:57 | 766331 DosZap
DosZap's picture

You must be close to me, Texas.(LOL)

We have 2 cities that need  mental renovation.........Austin, and Houston.(<;

Tue, 11/30/2010 - 22:40 | 766673 apberusdisvet
apberusdisvet's picture

Houston should be nuked.  Oh wait; the cartels are smuggling in Syrians to do just that; 85% of our refining capacity, dontcha know.

Tue, 11/30/2010 - 22:56 | 766706 dark pools of soros
dark pools of soros's picture

why are you on the interwebs??  it is soo fuckin liberal you know?  using all that technogoo from some fag professor.. it'll just make ya gay

Tue, 11/30/2010 - 18:34 | 766011 lawrence1
lawrence1's picture

Right, we bail our the banks and mega-rich but shouldnt have unemployment insurance for the unemployed whose jobs have been outsourced. 

Tue, 11/30/2010 - 18:40 | 766050 goldmiddelfinger
goldmiddelfinger's picture

Call me sceptical

Tue, 11/30/2010 - 19:02 | 766130 nmewn
nmewn's picture

"Next stop: gold much higher as the bubble mania is really unleased in such ETFs as GLD, UGL and PHYS."

Get there fustest with the mostest.

Tue, 11/30/2010 - 21:10 | 766494 Aristarchan
Aristarchan's picture

SHANGHAI - Investors are flocking to banks and famous gold stores in the city to snap up the yellow metal as a hedge against inflation.

At Lao Feng Xiang, a jewelry retailer in the city's Xuhui district, daily gold bullion sales have recently reached as much as two million yuan ($300,000).

Wang Ensheng, a spokesman for Lao Feng Xiang, said that in the past, it was rare to see sales reach 400,000 yuan in a single day.

In Nanjing, Jiangsu province, an investor reportedly bought 50 kg of gold bullion worth 15 million yuan on Nov 22, according to Modern Express, a local newspaper.

"Gold investment is regarded as a safe haven by wealthy investors when uncertainties exist in the domestic stock and property markets," Wang said.

Meanwhile, the continually increasing gold price is also recognized as a quick way to generate profit in the short run.

The price of gold in China has risen steadily in the past 11 months. The price of Au99.99 gold traded on the Shanghai Gold Exchange has increased from 243.89 yuan a gram on Jan 4 to 295.58 yuan on Nov 25, up more than 20 percent.

In contrast, the lead stock market indicator dropped more than 10 percent in the same period.

"Chinese people are likely to buy gold when the price rises," said Zhang Yongtao, vice-chairman of the China Gold Association.

Although the global gold price has softened a little since the United States announced positive economic data on Wednesday, Zhang predicted that the decline will be short-term.

"The loose monetary policy in the US and the latest clash between the Democratic People's Republic of Korea and the Republic of Korea is going to push up the price of gold," said Zhang. "But fluctuations may occur in the short run."

Benefiting from booming demand and the high gold price, Lao Feng Xiang is expected to generate sales of around 13 billion yuan in 2010, up 20 percent from 10.9 billion in 2009. Gold accounts for some 60 percent of the company's sales.

Gold demand from the jewelry and investment sectors in China was earlier expected to increase by at least 10 percent this year, the highest growth rate in recent years, according to the China Gold Association.

Zhang said the aggregate demand of the two sectors is expected to exceed 500 tons in 2010, up from 450 tons in 2009.

"People buy more gold mainly to hedge against inflation," said Zhang. China's consumer price index hit a new high of 4.4 percent in October, increasing from 1.4 percent in January.

"The fluctuating stock market and the tightening property market in China have also led investors to consider other investment channels," added Zhang.

Although the gold price is expected to increase, Zhang said small-scale investors should be more cautious in buying physical gold.

"Although some large gold firms have a gold repurchasing plan, transaction and processing fees require investors to take a long-term strategy in order to generate a profit," said Zhang.

From: China Daily

Tue, 11/30/2010 - 21:20 | 766511 MsCreant
MsCreant's picture

Good post.

Wed, 12/01/2010 - 06:19 | 767311 Snidley Whipsnae
Snidley Whipsnae's picture

Second the good post. About as close as we will get to the truth.

We need to keep in mind that China is an old culture and have had long experience with fiat currencies going belly up.

Spanish, Portugese and other silver coins were in common use in Shanghai, the center of trade, long before the great depression. Lots of the silver was buried and passed down through generations within families.

Various political forms and fiat forms have come and gone in China but the value of PMs has not been forgotten. The Chinese family is a strong unit and knowledge is passed from generation to generation.

Because the West has succumed to fiat fever does not mean that SE Asia/India have followed suit.

BenB is playing checkers, the SE Asians are playing chess. 

Tue, 11/30/2010 - 22:58 | 766714 Aristarchan
Aristarchan's picture

TIANJIN - China's major gold mining companies are planning to ramp up efforts to expand overseas as gold demand rises in China and domestic reserves fall precipitously.

China National Gold Group Corp, the nation's largest gold producer, said it will increase its annual capacity to 50 tons in five years, 30 to 40 percent of which will be produced overseas.

"We are looking for gold resources in Congo, Brazil, Russia, Venezuela and Mongolia, and most of them are in the early stages of geological exploration," said Du Haiqing, vice-president of the company.

The expansion by China National Gold as well as the Shandong Gold Corp Group comes as China - the biggest gold producer and second largest gold consumer in the world - faces a challenging situation in its supply of gold, according to the World Gold Council (WGC).

In the past five years, the WGC said the demand for gold has increased at an annual rate of 13 percent in China. A WGC report published in March said that if the demand for gold continues at its pace and becomes comparable with other major markets, China could exhaust its known gold mining reserves in six years.

China National Gold produces about 10 percent of China's gold but it has not as of yet had any overseas output. Du said the company is fairly cautious about overseas investments but is also being active.

Shandong Gold, a major player in China's mining industry, also plans to boost its overseas gold production.

"We hope that 30 percent of our annual output will be produced overseas by 2015," said Cui Lun, the company's vice-president.

The company has worked with companies in Mongolia, South Africa and South America to secure overseas mining resources. It plans to also work in Australia and Canada.

Another Shandong-based gold company, Zhaojin Mining Industry, sees the potential in overseas gold recourses.

"We are now focusing on the domestic market but we will go to other countries once we find good opportunities," said CEO Wang Peifu.

Wang said Zhaojin Mining Industry has followed a dozen of overseas projects since 2008. "We have negotiated with Papua New Guinea and the United States. But we don't want to rush," he said.

"It takes a long time for us to confirm the quality of the gold resources there and political issues matter a lot when it comes to overseas mergers and acquisition."

Statistics from the Shanghai Gold Exchange show that the price for gold jumped from 244.8 yuan ($35) per gram in early January to 288.1 yuan per gram in late November.

The recent $600 billion credit injection by the US government is likely to boost the demand for gold due to the expectations of higher gold prices.

"It is necessary for our company to go global due to the limited gold reserves in China," said Li Zhilin, general manager of the overseas development division with Zijin Mining Group.

The overseas push for gold follows a high level of activity worldwide from Chinese mining companies looking for metals such as iron ore.

Over the past 10 years, Chinese mining companies of all resources spent $50 billion in overseas mergers and acquisitions, 80 percent of which were finalized after 2008.

In 2009 alone, the figure reached $16.1 billion, accounting for 27 percent of the world's total volume of business, according to a report by Ernst and Young. About 58 percent of the transactions took place in Australia and Canada.

Zhang Zhenxi, a lawyer for TransAsia, which consults companies on overseas mergers and acquisitions, said that Chinese mining companies must go global due to the large population in China and the increasing demand for gold as a result of China's rapid economic growth.

"But the price of projects with good value in Canada and Australia have been bid up after the financial crisis. Chinese companies need to find other advantages in order to win the deal, such as cutting-edge technologies and equipment," Zhang said.

"Chinese companies still have a long way to go in terms of building and managing multinational companies due to their lack of experience and language barriers," he said.

- From China Daily

 

Tue, 11/30/2010 - 23:17 | 766758 ThreeTrees
ThreeTrees's picture

+1  Please continue to post these.

Tue, 11/30/2010 - 23:15 | 766752 Client 9
Wed, 12/01/2010 - 06:49 | 767322 Snidley Whipsnae
Snidley Whipsnae's picture

So this guy 'has a hunch' that gold is not going higher based on fundamentals, yet he tells us that almost every fiat currency in the world is being printed to death?

....and, he says that there are good opportunities in stocks?

....He is a messenger on a mission from the Fed/treasury, a shill, a troll.

....The portion of his portfolio that was committed to gold was invested in GLD?

....And he states that in the last year no central banks have purchased physical to add to their holdings of physical gold? An outright lie.

Why bother to post such drivel? Few here are going to take this clown seriously.  

Wed, 12/01/2010 - 13:41 | 768531 fiddler_on_the_roof
fiddler_on_the_roof's picture

you wasted my time. Ignore this post.

Tue, 11/30/2010 - 23:26 | 766792 MarkGregg
MarkGregg's picture

thought:  China wants to start dumping dollars so they let everyday Joes buy gold ETFs.  Then Chinese gov announces they are starting to stockpile gold.  Gold responds making chinese happy with their new investment so it is much easier to dump dollars.  then gold really takes off...

Wed, 12/01/2010 - 03:19 | 767218 MsCreant
MsCreant's picture

Could stop a revolution dead in its tracks.

Wed, 12/01/2010 - 04:22 | 767272 laosuwan
laosuwan's picture

china buys phsyical, encourages its people to buy ETFs to drive up the price, if the ETFs cannot deliver foreignors get blamed. Very clever.

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