The gold market will soon change much. The main trigger for the changes will serve China - on AMarkets materials.
5 Reasons Why China - an important factor in the yellow metal market:
1. China is now officially involved in the fixing of prices for the metal. Previously, the price of gold was determined in the London gold market Association (London Bullion Market Association, LBMA). And China is in the process did not participate. But with the introduction of the metric Shanghai Shanghai Gold Exchange has changed the situation. 10 of the 12 members of the exchange - this is the Chinese banks. The new metric will be more and more popular with time.
2. China is also involved in fixing the price of silver. Not long ago, China Construction Bank has joined a consortium of banks involved in the daily determination of the price of the white metal.
3. Yuan in the currency basket of the IMF. This is a strong step in the direction of strengthening the importance of the Chinese currency on the world market, along with the dollar and the euro.
4. China slows down the production of gold. China - the largest producer of the yellow metal in the world. 4-year-old bearish trend forced manufacturers to compress the production of gold. At the same time, increased production costs.
Schedule - Gold production in China. Dynamics:
5. The Chinese will actively invest in gold, if only because there is no decent alternatives in the global market.Gold Many players choose as a safe asset. Interest rates on government debt - a measly 1-2%. Bonds with low grades and a high risk of paying up to 15%, but the risk of loss is too great. The stock market and real estate market, too unattractive. The Chinese, among other things, very afraid of the devaluation of the yuan. Some of this fear is sublimated in the massive buying of physical and "paper" metal.