Gold refineries in Switzerland sent a record amount of gold to Shanghai last December, and Russia is buying gold in droves as well, as the United States experiences a time of tumultuous politics and the european banking system is reported to be on the verge of collapse.
Figures released at the end of January by Federal Customs Administrations showed that Switzerland, a world leader in gold production, sent 158 tonnes of gold to China, a five time increase over November’s sum and nearly three times the volume in December 2015.
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The increase in gold purchases by China and Russia could signal a change in strategy to diversify their gold holdings and shift the world economy away from the United States, in effect taking advantage of uncertainty spurred by the Trump administration. Chinese authorities have liberalized some gold laws recently, as Hong Kong brokers were recently allowed to place orders on the Shanghai gold market. Perhaps Chinese began buying as the price of gold dropped when Donald Trump assumed the presidency. Others cite the Chinese New Year for increased gold demand as the Year of the Rooster.
The Central Bank of China announced that by the end of 2016 it held its lowest amount of dollars in six years while instituting capital controls to stymie renminbi outflow. It’s easier for the Chinese to acquire gold than dollars.
China imported 770 tons of gold from Hong Kong in 2015, as well as 442 tons from Switzerland. China purchased had supplied 53 tons from Australia, and 16 tons from the United Kingdom.
China’s 2015 gold production is estimated at over 450 tons, according to the Chinese association of gold . PBOC holds 1,843 tons of gold, but many believe the nation could have been acquiring gold secretly.
Russia’s central bank is also increasing its holdings. According to The Sun, Russia purchased 1.6 tonnes of gold citing Donald Trump’s “unpredictable” nature.
The gold, stored in Moscow, St. Petersburg and Yekaterinburg, has led to Russia becoming one of the world’s leading gold buyers.
Combined with recent news Iran would look to settle oil trades sans U.S. dollars, the news could signal a move away from U.S. dollar supremacy.