China De-Dollarization Pushes Into Hyperdrive, Adds 100 Tons Of Gold Amid Trade War Chaos

Zero Hedge | 10/7/2019 | Staff
jesse456 (Posted by) Level 3
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As the trade war continues to escalate, China's rapid move towards de-dollarization continues. China added more than 100 tons of gold to its reserves since December 2018 and has also been divesting US Treasuries.

Bloomberg reported the People's Bank of China acquired 188,800 ounces, or about 5.9 tons of gold in Sept., raising total holdings to 62.64 million ounces in September from 62.45 million in August. Over the last nine months, China added a whopping 100 tons of gold to its reserves as a hedge to a deepening trade war.

Gold - High - September - Turmoil - World

Gold jumped to a six-year high in September as economic turmoil across the world is pointing to a global trade recession in 2020. Central banks have been leading buyers of the precious metal, especially ones based in emerging markets. Gold purchases by China and central banks will continue through 2020, Bloomberg notes, as protectionist policies spurred by the Trump administration have blown up global supply chains and will continue to produce volatility in global equity markets for the foreseeable future.

"Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function," said Howie Lee, an economist at Singapore-based Oversea-Chinese Banking Corp.

China - Superpower - Right

"As China becomes a superpower in its own right, I expect more gold-buying."

Last month's purchases boosted the People's Bank of China's gold reserves to 62.64 million ounces. As shown below, Comex Gold futures tend to rise when China is adding.

Continue - Gold

The Chinese continue to add gold...
(Excerpt) Read more at: Zero Hedge
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