China to Add Staggering 5,042 Tons of Gold for 10% Reserves

On the heels of the Robin Griffiths interview where Griffiths is looking for the Chinese to increase their gold reserves five-fold from 2% to 10%, King World News interviewed Dan Norcini to get his thoughts. “Eric, if you base Chinese reserves on $2.5 trillion, for China to move from 2% to 10% they will have to increase their gold holdings a staggering 5,042 tons at current prices.”

Norcini continues:

“I’ve been seeing reports and I don’t think that it is any secret that the Chinese officials have been telegraphing their intention to dramatically increase their gold reserves. The reason behind this is that China wants to ultimately position the Yuan for the longer-term as being part of a basket of currencies that would comprise a new official global reserve currency.

A dramatic increase in gold holdings is necessary for China to achieve this goal. By way of comparison, right now both the US and Germany have roughly 70% of their reserves in gold, while China is at a paltry 2%. We don’t want to leave out China’s neighbor Japan which also only holds 2.5% of their total reserves in gold.

Going back to the 5,000 tons, we are talking about two years of global production. Where is the supply going to come from? China is in competition with individuals, funds and other sovereign wealth funds for a portion of the global gold production.

That is why I believe there will be continued buying support on any subsequent retracements in the gold price, because China will be using these opportunities to acquire the metal. I always think back to when India jumped in and bought 200 tons of gold at $1,040. I said at that time that it was doubtful that we would ever see gold below $1,000 again.

That move by India signaled to me that the Asians were serious about increasing the amount of gold that they were going to be holding as part of their official reserves.

What this means to the King World News readers is that if you are looking to acquire gold you need to take advantage of the dips in price because they have been relatively short-lived, now that all of the Asian central banks are on the prowl to acquire more of the yellow metal.”

Interestingly Norcini notes that the Japanese need to increase their gold reserves as well. With so many entities lined up to buy and no major sellers, we should see continued upward pressure on the price of gold for years to come.

Eric King
KingWorldNews.com