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With the uncertain future of the U.S dollar, China appears to be showing an increased interest in investing in gold as an alternative option to holding dollars.
This is evident when we look at data, recently released bythe U.S Treasury, which shows that China has sold off $34 billionof its U.S Treasuries (government debts issued by the U.S in the formof bonds, notes or bills) since December 2009, which suggests Chinaslack of faith in the U.S dollar.
Also with China's recent decision to acquire more gold mining companiesand their move into ETF's (Exchange Traded Funds), this could also signifythat they are looking to diversify into gold.
In the long term it appears that China is trying to possibly cash in on the currentglobal economic crisis. Its move to buy gold bullion at an increasing rate, wouldindicate that investing in gold, at this point in time, would be a wise option. |