Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 23 May 2015 by

Xinhua: China Sets Up Gold Fund For Central Banks

On May 12, 2015, I reported China’s Silk Road economic project would include gold business. A month prior to that Shanghai Gold Exchange (SGE) chairman Xu Luode had “proposed to integrate gold market development into the strategic development plan of the Silk Road”. Shortly after, in early May it was announced gold mining company Polyus in Russia’s largest gold deposits at Natalka in the Magadan’s Kolyma district would cooperate with China’s largest mining company China National Gold Group Corporation in resource exploration, technical exchanges and materials supply. The first gold business activity along the new Silk Road was reality. Little did we know about any additional plans the Chinese have in store regarding gold and the new Silk Road.

Today we got a glimpse of what could be a global game changer, China is planning to launch “a 100 billion yuan fund led by the SGE, …which will in turn facilitate gold purchase for the central banks of member states to increase their holdings of the precious metal. This was just published by news outlet Xinhua in China mainland. Xinhua also published an important article in late 2013 in which it said, “it’s perhaps a good time for the befuddled world to start considering building a de-Americanized world… a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies… As a result, the world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites”. It’s being thought these articles are written indirectly by the Chinese government. 

Xinhua
Xinhua

It’s no secret it has been in the interest of the US to remove gold from the international monetary system to leverage their paper money power. Gold still is the US dollar hegemony’s Achilles heel. Is China now attacking the US by quickly strengthening ties with Asian and European countries through the Asian Infrastructure Investment Bank (AIIB), develop the new Silk Road and implementing gold as a financial center piece in these projects? We do know China has been buying A LOT of gold recently, has setup an international gold exchange (SGEI) – to trade gold in renminbi – and is likely setting up a new monetary system that includes gold. In my post PBOC Gold Purchases: Separating Facts from Speculation we could read a few clues from media written in Chinese. Toady we got a clue written by the Chinese in English, for the world to read. From Xinua:

XI’AN, May 23, 2015 (Xinhua) – A gold sector fund involving countries along the Silk Road has been set up in northwest China’s Xi’an City during an ongoing forum on investment and trade this weekend.

The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan in three phases.

China is the world’s largest gold producer, and also a major importer and consumer of gold. Among the 65 countries along the routes of the Silk Road Economic Belt, there are numerous Asian countries identified as important reserve bases and consumers of gold.

About 60 countries have invested in the fund, which will in turn facilitate gold purchase for the central banks of member states to increase their holdings of the precious metal, according to the SGE.

China does not have a big say in gold pricing because it accounts for a small share of international gold trade,” said Tang Xisheng …

Therefore, the Chinese government seeks to increase the influence of RMB in gold pricing by opening the domestic gold market to international investors.

Interesting times. This could be related to the “gold bank guided under the PBOC and led by the China Gold Association (CGA)”, President of the CGA Song Xin was writing about in 2014. From Song:

Establish a Gold bank. We need to establish our gold bank as soon as possible, and enable it to break the barrier between the commodity and monetary world. It can further help us acquire reserves and give us more say and control in the gold market. It may be guided under the PBOC and led by the China Gold Association, involving leading gold industry companies and commercial banks, and it’s business would include: gold pricing (fix), gold financing and leasing, gold-guaranteed payments, gold saving accounts, gold lending, gold production chain financing and issuance and trading of paper gold and other gold investments. This gold bank can then naturally use market-oriented methods to change commodity gold into monetary gold reserves, thus help us increase our strategic gold reserves.   

…That is why, in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 tonnes mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 tonnes, more than the US.

Reading the underlined part, this fits into the Xinhua piece published today.

Koos Jansen
E-mail Koos Jansen on:

  • Doolie

    These articles cheer me up so much !
    Your words on the world needs a de-Americanized world are so spot on !

    I live in Asia and see the massive interest the public have in gold. Asia has over 3 Billion people. USA has a population of 300 million. The irrelevance of the west in gold pricing will become so apparent.

    The game is in its final phase – play wisely !

  • Fraser

    Leading Western countries have gold as a high proportion of their currency reserves. So too do financial institutions such as the IMF. It is therefore natural that Asian banks such as the AIIB should follow this course. However, will these new players allow gold to trade freely or will they simply continue the West’s price suppression. Personally I cannot see any Government allowing gold to compete with their fiat currency ponzi scheme. Until the Yuan is “free floated” AND backed by gold, these are just empty words.

    • 59LesPaul

      Allegedly Western countries have a high proportion of their currency reserves in gold. How much gold as opposed to gold “receivables” do they actually still have? If the east demanded trade settlement in physical gold these paper gold games instigated by the US and UK would immediately cease.

      • Fraser

        Everything is “allegedly”, what is your point? And you are wrong, if the East demanded physical gold in trade settlement, then there would be no trade. My main point however is that the is no evidence that China intends to free-float-gold and thereby kill all currencies (including the Yuan). So regardless of whether we have the USD, Yuan or SDR as the reserve currency, the ponzi scheme will continue and the larger the physical gold holding of the manipulator-in-charge, the longer it will continue.

        • Fight Treason

          If every government will continue the manipulation, including China… then just how will sound money and a gold standard ever return? I think you look at China as totally corrupt… like the USA. Yet they are massively expanding trade relationships and joint ventures with MANY other countries… think they are screwing all of them? All their partners are fools? Or are these deals founded on mutual benefit, unlike anything the US ever tries to do, like the cancerous, treasonous TPP scam… and the never ending market/PM manipulations by the US Gov, in league with scum like JPM and Goldman, etc…

          There is no evidence that you have a clue, dude (no offense).

          • Fraser

            You digress – the question is not who is the most corrupt (China or USA), the question is whether China (which currently micro-manages everything including its own currency) is going to suddenly change its mind, destroy its own currency and the value of its huge USD reserves – just to appease a few gold-bugs? Sorry, but I am not that stupid…

          • Fight Treason

            I don’t know if you are stupid, but your understanding of currencies and gold and China are childish. You don’t think the US “micro-manages” their currency?!?!!? And… China… “undermine” all they have created? LOL!! Do you refer to their HUGE debt, their massive shadow-market banking system, their collapsing economy, the monster bubble in their stock market? Their massive QE?? Sure they have big USD reserves, bonds mostly paying less than 1%… most of which was obtained when the dollar was around 70-80 instead of at 95ish where it is now… so the drop would be deMinimus… And they are unloading as fast as they can… If they de-peg from the dollar, you think that their currency AND their US bond holdings will BOTH be destroyed? That is just plain foolish… their currency will drop BIG… but that will NOT cause the dollar to drop. Two very different things. If China backed the Yuan with gold… THAT would crash the dollar… but China’s massive gold holdings would skyrocket. You need to do some homework, fella, before you post such uninformed nonsense.

          • Fraser

            We must be reading different articles. The one I read states (1) China wants more say in the gold fix (currently denied by the West), and (2) China wants to buy more gold by selling stuff (in Yuan) along the silk road and elsewhere. While the one you are reading states (1) China is about to abandon its LONG term plans, so that (2) You can get rich next week. Let’s agree to wait and see.

          • Fight Treason

            You deal in rampant, unsupported speculation. The US screwed China in a large silver lease… and is considering getting foolishly involved in the island disputes between China and Japan… they also have attacked Russia in several major ways, most importantly in the laughable COUP in Ukraine, followed by insane and unjustified sanctions. Chins is backing Russia… and it makes no sense to think China and the US are coordinating the manipulation… did the US join the AIIB?? Of course China wants a say in PM pricing… given that any fool knows the US is totally manipulating the markets now. You think that China supports US hegemony? Insane! The US has become a militant, rogue nation, even attacking it’s own citizens via the teardown of the Constitution and the Bill of Rights. Yes, we will wait and see… but I have no more time to educate you… pay a few bucks and sign up with Jim Willie at the Goldenjackass.com… you will learn a few FACTS, and sound far more intelligent.

          • Fraser
          • Fight Treason

            LOL!! a pseudo-intellectual load of bogus pigflop… much like your insipid posts… what a moron you are. I can’t fix a deeply retarded child like you (and your daddy) so… Smell ya later, colonRoach!

          • JanNieuwenhuijs

            Dear Fight Treason,

            This comment section is meant for civilized debate. Please change/edit your last comment within 24 hours or I will remove it and will be forced to block you from commenting here.

            Thanks

          • Fight Treason

            I hope you noticed that I was responding to name calling. Comment revised. thanks for a great blog.

          • Big_Shiny_Au_Nuggets

            You have demonstrated yourself to be a shameful individual.

          • Fight Treason

            Personal attack… flagged.

          • Big_Shiny_Au_Nuggets

            Here…put your dummy back in.

          • Fight Treason

            Sorry, I don’t speak “Retardo”… could you re-phrase?

      • SLK_R

        currency reserves …. what currency reserves? They have all the deficits for the most part.

    • Sven

      So when Song Xin says, “in order for gold to fulfill its destined mission, we must raise
      our gold holdings a great deal,. Step
      one should take us to the 4,000 tonnes mark, next, we should increase step by step
      towards 8,500 tonnes, more than the US.”

      What’s this “destined mission” business?

      All that gold being accumulated is taking that gold out of the flow. Over time, as other institutions start accumulating physical gold it will put further pressure on price. It can’t be contained forever through naked short selling.

  • SLK_R

    So … gold may be $3,000 or $4,000 an oz. Some people / countries may have woken up … or some not. Still want some gold seriously? Sorry you have to be member… or you can go over there and get some paper.. the price is still sort of much the same!

    • jj

      Maybe China is planning on de-pegging the yuan and needs the gold to put a floor under it in case it depreciates violently ..
      I think gold is one of the reasons the usd is strong,because of their “alleged” gold reserves .. same for the swissy .. that country has a gdp of less than los angeles .. so something else must be driving the strength in the chf ..

      • SLK_R

        China would have the gold even if just to prevent others from having it … hey gold is still free if you have the printer !

  • SLK_R

    this smells strongly that a part of trade along the new economic belt will be / can be in gold. Don’t have gold? Then you must sell your stuff / services / assets for some!

  • Big_Shiny_Au_Nuggets

    Koos…thank you for your excellent information source.

    Glad to hear you are well again.

    Keep up the good work. (please).

    • JanNieuwenhuijs

      I’ve asked Fight Treason to change his comment, or he will be blocked.

      • Big_Shiny_Au_Nuggets

        And you have deleted two of my comments, as tame as they were e.g. ‘Here…put your dummy back in’ yet leave a comment from ‘The Facts’ name calling people ‘retardo’. Surprising.

  • Sven

    Well it looks like they’re following Song Xin’s advice quite thoroughly. Do they have 8,500 tonnes aurum? More?

  • digi

    As can be seen, people that read the Western propaganda have one take and the people that seek out information via various global sources have a much more different take on the matter. In the end, the discuss will be void becoz when SHTF, these so called individuals will like many Greeks be too busy locating their next meal let alone spending time discussing PM vs paper PM. Gold bugs is a Western promoted BS term that is similar to description to conspiracy theorists. Sad thing is for these quite ignorant people is that over half the world is now WHAT YOU REFER to GOLDBUGS! Also, its blatantly clear from Koo’s work that the Eastern powers are shifting their reserves to hard assets. US has not audited Fort Knox for how long? 8K tons isn’t hard to audit, why the charade?? You have to be pretty brain dead to think the cupboard is still full when they had to raid the GLD last year (quite well covered).

    If they don’t even know that Bernay’s dictated how the Western media works, and how they set the agenda is a complete waste of time discussing anything with these people as they have yet to know their predicament.

Copyright Information: BullionStar permits you to copy and publicize blog posts or quotes and charts from blog posts provided that a link to the blog post's URL or to https://www.bullionstar.com is included in your introduction of the blog post together with the name BullionStar. The link must be target="_blank" without rel="nofollow". All other rights are reserved. BullionStar reserves the right to withdraw the permission to copy content for any or all websites at any time.