China is boosting its influence in global gold markets by establishing its largest gold-investment fund led by Shanghai Gold Exchange (SGE), which is expected to raise about 100 billion yuan ($16.1 billion).
China has established its largest gold-investment fund in northwest China’s Xi’an City, the ancient starting point of the famous Silk Road, aiming to bolster Beijing’s role in global gold trade.
The initiative is a part of China’s ambitious New Silk Road project and about 60 countries have already invested in the “Silk Road Gold Fund.” While the new fund is aiming to invest in mining projects in the region, it is expected that central banks of the member states will increase their holdings in the precious metal.
Citing state-run Shanghai Securities Journal, Asia markets expert Laura He underscores that in addition to buying stakes in gold-mining projects and companies along the New Silk Road, the gold fund will be also aimed at investing in gold-mine stocks and establishing gold exchange-traded funds.
“The fund may also boost China’s power over the world gold market and could increase the use of the yuan in pricing gold,” Laura noted, quoting Chinese economist Song Qinghui.
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Meanwhile, the International Monetary Fund (IMF) has recently admitted that the Chinese currency is “no longer undervalued,” actually opening doors for the yuan to global currency market.
In the light of Beijing’s latest move, the dollar proponents’ concerns are looking far from being “groundless.”
Full article: Power of Gold: China Establishes Its Largest Gold-Investment Fund (Sputnik News)
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