Chinese Gold Inflation
By Christian A. DeHaemer | Monday, July 11th, 2011
Will gold break out?The yellow metal was pushing an all-time high this morning. Gold for August delivery put on more than $12 to $1,557.20 an ounce at the New York Mercantile Exchange. Last week, gold gained 4%. Debt worries in the United States and Europe coupled with a slowdown in China are moving investors into the safety of gold...Gold priced in euros jumped two percent this morning to a new record of 1,104.15 an ounce. The EU is meeting again today about the Greek bailout problem.
Word on the street is the Greeks are buying up gold as they are afraid of their banking system. But the Chinese are the ones buying gold by the bucketload.The Chinese are getting hit hard by inflation. China announced on Saturday that inflation surged to a three-year high of 6.4% in June despite five interest rate hikes since October.As we know, it is much easier to create inflation than it is to tame it...The Chinese now have the option of changing their savings accounts into gold at their bank, and they are taking advantage of this convenience.It is estimated that China will surpass India as the world's largest gold buyer this fall. Chinese gold buying has grown in the double digits annually for the past decade, and it is expected to grow 10% to 15% this year.We are very close to a turning point. If we can break out above $1,560 an ounce, we will be at $2,000 very quickly.
Buy gold.
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