18 November 2017
AsiaNews.it Twitter AsiaNews.it Facebook
Geographic areas




  • > Africa
  • > Central Asia
  • > Europe
  • > Middle East
  • > Nord America
  • > North Asia
  • > South Asia
  • > South East Asia
  • > South West Asia
  • > Sud America
  • > East Asia


  • » 05/12/2006, 00.00

    ASIA

    Clashes between US, China and Iran may account for record gold prices

    Maurizio d'Orlando

    The gold metal is commanding its highest rate in 25 years. Apart from political motives, it could well be acquisitions by private enterprises in India and China, or international investment funds, which are pushing prices up.

    Milan (AsiaNews) – Gold prices rose to over 725 dollars an ounce in yesterday's bargaining. This is the highest quotation in 25 years. Currently, the quoted price stands at 726 dollars.

    Apart from those who maintain that the increase in prices is a bubble destined to burst or, at least, to deflate with time – definitely, gold has very limited technical uses – the cause of the record high is generally thought to lie in the growing demand on the part of private enterprises in India and in China, or in politics. The rising quoted prices are thought to be linked to tension between the United States and Iran because of Iranian nuclear programmes or to Chinese operations.

    The recent increase could well be linked to a decision by China's monetary authorities to increment their reserves of the yellow metal. According to several sources, China – its Central Bank has about 600 tons of gold – will shortly aim to hold up to 5% of its currency reserves in gold. This proposal means a volume of around 2,400 tons acquired by China, circa two-thirds of annual global production. The reasons for this diversification would be political, that is, linked to hidden differences with the United States, as well as purely economical, owing to the fact that China is currently one of the countries with the largest financial liquidity reserves in the world, held mainly in dollars. From a strictly economical viewpoint, protecting Chinese currency reserves from the weakness of the dollar could be considered to be a wholly understandable move. In fact, it must be noted that the American Federal Reserve increased the interest rate a few days ago, without any resulting benefit for the dollar exchange rate.

    Other observers said that now even private enterprises in China, as in India, can buy gold. India is a country with a rural population that has always trusted gold, rather than banks, with its savings. Even before the liberalization of possession of gold by private owners, in India, historically, the dowry of young brides in peasant villages used to consist of bracelets and necklaces of gold. Given the notorious precariousness of the domestic banking system in China, it is logical to suppose that private enterprises in China may want to hold some of their savings in gold.

    Other observers have said the increase in prices is down to the acquisition in investment funds, in search for alternative solutions to counter risks linked to inflation and the possible collapse of world stock exchanges, especially American and European ones.

    Others still say that circulation of paper money has been at unsustainable levels for some time now. They claim that not only in western countries, but also in the rest of the world, finance, at least in the short-term will upset every aspect of economy, production and even social and personal life.

    Should any of these speculations turn out to be true, the next stage of gold prices could be not 800 but 1,800 dollars per ounce, and at the same time, we could see crude oil selling for 200 dollars a barrel.

    e-mail this to a friend Printable version










    See also

    11/02/2009 CHINA
    China's exports collapse, more than 20 million jobs lost
    Exports dropped by 17.5% in January, more than the most downbeat projections. Imports are down by 43%: the markets of the Asia-Pacific region are in crisis. It is feared that growth will not exceed 6%. Now attention is on what the government will do, after focusing so far only on public investment and bank financing.

    18/01/2012 ASIA
    World Bank: global growth heading for a crisis from which "no one will be saved"
    The world economy will grow by only 2.5, compared with forecasts of 3.6. Eurozone, U.S., China, India, Japan all se downward trend. Growth in developing countries will be 5.4, 1.4 in rich countries,. Need to promote social welfare and infrastructure programs. Food prices fall by 14%, but the problem of food will remain crucial for poor countries.

    30/11/2009 INDIA
    India grappling with inflation above 15%, record gold process and the crisis in Dubai
    The rise in prices, especially for basic necessities, creates broad discontent among the population and a trading of accusations between political parties. The state buys gold, but says it still has confidence in the dollar. Major impacts from the real estate crisis in Dubai.

    09/06/2011 ASIA
    Rise in oil prices after OPEC disagreements
    Venezuela and Iran oppose the Saudi Arabian proposal to increase production by 1.5 million barrels per day. Collapse of prices feared. Gaddafi representative attends meeting and ensures the usual annual production.

    06/03/2008 ASIA
    Prices for rice, Asia’s essential food, skyrocketing
    Price rises will continue throughout 2008. Vietnam and other countries are cutting exports. China can no longer meet its domestic demand. UN food aid to region’s poorest countries is at risk.



    Editor's choices

    HONG KONG - CHINA - VATICAN
    Mass for a deceased underground priest. Card. Zen asks for God ‘s grace to save the Church in China and the Holy See from the 'precipice'

    Li Yuan

    Fr. Wei Heping, 41, died in mysterious circumstances, his body dumped in a river in Taiyuan (Shanxi). For the police claim he committed suicide. Family members are not allowed to even see the autopsy report. For Card. Zen the Holy See (which "is not necessarily the Pope") seeks a compromise at all costs with the Chinese government, risking "to sell out the faithful Church". Justice and Peace publish a booklet about Fr. Wei, not to forget.


    VATICAN - ITALY
    Pope: No more war, its only fruit is death, 'our self-destruction'



    Marking the Feast of All Souls, Francis celebrated Mass at the American Cemetery in Nettuno. "When so many times in history men think of a war, they are convinced of bringing a new world, they are convinced of making a 'spring'. It ends in a winter, ugly, cruel, with the reign of terror and death."


    AsiaNews IS ALSO A MONTHLY!

    AsiaNews monthly magazine (in Italian) is free.
     

    SUBSCRIBE NOW

    News feed

    Canale RSScanale RSS 

    Add to Google









     

    IRAN 2016 Banner

    2003 © All rights reserved - AsiaNews C.F. e P.Iva: 00889190153 - GLACOM®