Friday, April 24, 2009

US dollar Collapse and Gold: China reports 76 percent increase in gold reserves. RMK.v, TNR.v,, SNU.v, OK.v, MGN,, ASM.v, FVI.v, BTT.v,

US Dollar will be put to Crash Stress Test by markets after this Chinese move. Even all this talk about IMF Gold sales can not push the Gold below 750 USD/oz. Will this sale became another scam of the Century to allow to cover Shorts in the Comex markets? It will be interesting to see who will be allowed to buy Gold from IMF: if Banks - Scam of the Century is in Action. Anyway this sale will be pivotal for the Gold market it is the last road bump to much higher valuations.
Warning! This banknote is an artist expression and we do not know yet the date of its official issuance into circulation.

Our Crash Alert must be reflecting this market developments as well. China is moving fast diversifying from US Dollar holdings buying Copper and other resources and now old solid Gold is in the picture. Gold will develop a Buy signal on daily on its move up from here on MACD. Today's Crash Test announcement will feed markets development further.

"BEIJING - China has increased its gold reserves by 76 percent since 2003 to 1,054 tons and now ranks fifth among nations with the biggest holdings, a state news agency reported Friday.
The figure reported by the Xinhua News Agency would rank China behind the United States, Germany, France and Italy in reserves, according to data from the World Gold Council, an industry group.
Xinhua said Hu Xiaolian, head of the State Administration of Foreign Exchange, disclosed the figures in an interview.
Beijing has steadily added to its holdings of foreign assets amid an export boom that has swelled its trade surplus. Its foreign currency reserves are the largest in the world at just over $1.9 trillion.
Premier Wen Jiabao expressed concern last month about the safety of Beijing's holdings of U.S. government debt and appealed to Washington to avoid doing anything, in response to its financial crisis, that might weaken the dollar.
Also last month, the central bank governor called for a new global currency to replace the dollar, which is widely used for trade and storing national reserves.
Beijing also added to its gold reserves twice earlier this decade, raising its holdings from 394 tons to 500 tons in 2001, and to 600 tonnes in 2003, Hu said."
Even better headline from Reuters: IMF scam is now apparent - COMEX Gold paper market and its Shorts are going to implode, they need Gold to cover:
SHANGHAI/BEIJING - China revealed on Friday that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes - or a pot worth about US$30.9-billion - and confirming years of speculation it had been buying.
Hu Xiaolian, head of the State Administration of Foreign Exchange, told Xinhua news agency in an interview that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003, when China last adjusted its state gold reserves figure.
The confirmation of its surreptitious stockpiling is likely to fuel market talk about Beijing's ability to buy secretly and its ambitions for spending its nearly US$2-trillion pile of savings. And not just in gold: copper and other metals markets are booming thanks to China's barely-visible hand.
Speculation has gathered speed over the last year, since the tumbling dollar has threatened to weaken China's buying power - and give it yet more reason to diversify into gold, oil and metals.
Gold prices jumped on the news of Chinese buying and were up more than 1% on the day at US$912.05 an ounce at 0715 GMT. By a Reuters calculation, China's holding of gold would be worth around US$30.9-billion at current prices.
That accounts for only about 1.6% of China's total foreign exchange holdings and is little more than one-tenth of the value of the U.S. gold reserve, the world's biggest. It also means gold has slipped as a share of China's total reserves from about 2%, based on end-2003 prices.
Only six countries hold more than 1,000 tonnes, and China is ranked fifth, having leap-frogged Switzerland, Japan and the Netherlands with its announcement.
However, the International Monetary Fund and the SPDR Gold Trust exchange traded fund are even bigger, leaving China with the world's seventh-biggest pot of gold.
Several gold market participants said they thought China had bought on the international market, helping to absorb hundreds of tonnes sold off by central banks and the International Monetary Fund in recent years.
"China has been buying via government channels from South Africa, Russia and South America," said Ellison Chu, director of precious metals at Standard Bank in Hong Kong.
But Hu said the increase in China's stocks was achieved by buying on the domestic market and from domestic producers.
China is the world's largest gold producer and does not permit exports of gold ingots, only jewellery, leaving plentiful supplies for the domestic market.
China produced 282 tonnes of gold last year, meaning the state bought around one quarter of domestic production, assuming 454 tonnes increase in state purchases were spread out over the six years since China last reported a change in its holdings.
Despite the rumours, buying by the state was partially obscured by soaring demand for gold as an investment, especially after the bursting of the Shanghai stock market bubble last year.
Investment demand in China rose to 68.9 tonnes from 25.6 tonnes in 2007. But that was still less than one third of retail demand in India, where total bullion consumption topped 660 tonnes last year.
Hu said China recently reported the change in its gold holdings to the International Monetary Fund and would include the latest change in central bank reports and balance of payment statistics.
She did not say when China notified the IMF.
Although gold rose after Hu's comments were published, the price move was not a huge one for the highly liquid market. Prices had jumped by US$13 in the space of an hour on Thursday.
Gold market participants said the news signalled likely further buying by China.
"The comments indicate that China will buy more gold as reserve to improve its foreign reserve portfolio. This is a trend," said Yao Haiqiao, president of Longgold Asset Management.
Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tonnes.
"It's not a matter of a few hundred, or 1,000 tonnes. China should hold more because of its new international status, and because of the financial crisis," he said.
"The financial crisis means the U.S. dollar value is changing fast, and it may retreat from being the international reserve currency. If that happens, whoever holds gold will be at an advantage."
The European Central Bank recommends its member banks hold 15% of their reserves in gold, but among Asian nations the percentage is far smaller, said Albert Cheng, World Gold Council managing director for the far east.
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