Posted By Isaac Nuriani
Look, I hate communism as much as you do and am usually the last one to give countries like China any praise. But I gotta give ‘em props for the way they are handling their people’s love affair with gold and silver. In case you missed it, China just established its own gold and silver fix to compete with the twice-daily London fixes.
It’s when a bunch of bankers sit around a table and agree on the price of a commodity, such as precious metals. Up to now, the London fix was the only game in town for setting gold prices. China, which dominates the gold market, finally took the reins and created its own gold fix in Shanghai, denominated in its currency, the yuan (the London fix is in U.S. dollars).
Because it shows China is really serious about its commitment to gold and silver. As a matter of fact, shortly after it launched its Shanghai fix, the price of silver spiked higher due to “heavy buying of silver in Shanghai, and that has triggered buying in gold as well,” according to Reuters, which added, “It’s an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market.”
Now, China wouldn’t bother with all this if its citizens weren’t so gold crazy. You Gotta love that! A billion gold fanatics must surely be good for demand, now and in the future. I believe the new fix will be even more competitive once China make its currency fully convertible with other global currencies, such as the U.S. dollar, the euro and the British pound. I also believe China is too proud to not let the yuan reach full convertibility, so the Shanghai gold fix is only going to get more powerful over time. China is finally assured that it will be able to buy enough gold to satisfy its growing population.
By the way, the Indian population is growing even faster, and they are just as fanatical about gold as are the Chinese, perhaps more so. All this helps to explain why gold and silver should be an important part of your retirement investment plans. In other words, if you haven’t done so already, it’s time to open an Augusta Precious Metals Gold or Silver IRA. With these, you can accumulate precious metals and maybe even get a tax deduction all at the same time. I say, let’s beat the Chinese at their own game and grab our fair share of gold before its breaks through the $1,300/ounce mark!
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