Dear CIGAs,
Regarding Gold and the Chinese increase in lending rates:
The key factor in gold has been the dollar and will continue as such.
The increase is not dollar positive, therefore do not concern yourself.
Gold is money.
Jim Sinclair’s Commentary
China does what is good for China but meaningless towards currency induced cost push inflation.
China’s central bank to raise one-year interests rate by 0.25% points
English.news.cn 2010-12-25 18:30:48
BEIJING, Dec. 25 (Xinhua) — China’s central bank will raise the one-year lending and deposit interest rate by 25 basis points beginning Dec. 26, according to a statement posted on the website of the People’s Bank of China (PBOC), the central bank, on Saturday.
This is the second time the central bank has increased interest rates in 2010, which raised the one-year lending rate to 5.81 percent and one-year deposit rate to 2.75 percent.
The PBOC increased the benchmark lending and deposit rates by 25 basis points on Oct. 20, which was the first time in almost three years.
The rate hike came after the central bank vice governor, Hu Xiaolian, said Friday that China would bring its overall money supply to a normal level with a range of policy tools, as the government shifts monetary policy from "moderately loose" to "prudent" to rein in rising inflationary pressure and curb asset bubbles.
The country’s consumer price index(CPI), a main gauge of inflation, accelerated to a 28-month high in November of 5.1 percent, while new loans reached 7.45 trillion yuan in the first 11 months of this year, compared to the government’s full-year target of 7.5 trillion yuan.
Jim Sinclair’s Commentary
Of this you can be sure. China never tells you exactly where they are looking at.
Gold miners to go global
Updated: 2010-12-01 09:07
TIANJIN – China’s major gold mining companies are planning to ramp up efforts to expand overseas as gold demand rises in China and domestic reserves fall precipitously.
China National Gold Group Corp, the nation’s largest gold producer, said it will increase its annual capacity to 50 tons in five years, 30 to 40 percent of which will be produced overseas.
"We are looking for gold resources in Congo, Brazil, Russia, Venezuela and Mongolia, and most of them are in the early stages of geological exploration," said Du Haiqing, vice-president of the company.
