Sources close to “Smart Trade Group” suggest that recent comments from a high-ranking Chinese official stating that gold is not considered to be a “primary investment” for China as it diversifies its $2.4trillion of foreign currency reserves should be taken with the proverbial pinch of salt.
The reasons given, including the fact that a much higher price would hurt Chinese consumers of gold, were called “implausible” by one of the sources who cited the fact that China is the world’s largest producer of gold and second only to India as a consumer.
The Asia-based private fund believes that the comments may be aimed at talking down the price in preparation for a large purchase and a “Smart Trade Group” analyst suggested that the comments echo those of George Soros, the billionaire hedge fund manager who described gold’s recent rises in price as a bubble whilst simultaneously increasing his fund’s holdings in the SPDR Gold ETF by $700 million.
‘Smart Trade Group’ still consider gold to be the ultimate hedge against global measures to combat the effects of the recession and urged clients to retain their holdings.
Source: http://www.prlog.org/10574230-smart-trade-group-worldwide-economics-chinas-comments-on-gold.html
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