This Month in Gold – November 2012

China’s Currency Rises in US Backyard
Financial Times – Two scholars from the Peterson Institute of International Economics write: “Would-be US leaders would do well to note that for probably the first time since the Second World War the dollar bloc in East Asia has been displaced. In its wake a currency bloc based on China’s renminbi is emerging.” Seven out of ten currencies in the region now track the renminbi more closely than they do the US dollar. This shift is occurring despire Beijing’s reluctance to liberalize its financial and currency markets.
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Chinese Gold Imports YTD Top Total ECB Holdings
ZeroHedge – Through the end of August 2012, China imported more gold year-to-date than the entire European Central Bank stockpile. Specifically, from January 1 to August 31, China purchased and imported a whopping 512 tons of the yellow metal. The ECB has a mere 502 tons of bullion in total. By New Year’s Eve, it is safe to assume that China will have imported more gold in one year alone than the eleventh-largest official cache on earth: India’s 558 tons. China’s rapid shift to hard currency dovetails with its marked unwillingness since the end of 2011 to bring additional US government securities onto its books.
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German Auditors Want Gold Reserves Verified
Reuters – The German Federal Court of Auditors, the government’s accounting arm, has called on the Bundestag (parliament) to order a physical inventory check of the nation’s bullion holdings. Germany owns 3,400 tonnes of gold, in large part held abroad at the Federal Reserve Bank in New York, the Banque de France, and the Bank of England. The Bundesbank (central bank) insists that written assurances from its foreign counterparts are sufficient. The auditors, unsurprisingly, disagree.
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Chinese Bullion Purchases from Australia Jump 900%
The Australian – Australian sales of the yellow metal to China have soared an eye-popping 900% during the first eight months of 2012. At $4.1 billion so far this year, gold is now Australia’s second largest physical export to China after iron ore. Perth Mint is the chief supplier of bullion to China. Chinese citizens are buying gold to preserve wealth in times of escalating economic uncertainty, and China’s central bank is buying aggressively to diversify away from weak-kneed western fiat currencies.
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