Wednesday, March 26, 2014

Chinese Investors are Gobbling up Whatever Physical Metal They Can

As we all know, Chinese investors are gobbling up whatever physical metal they can at these low gold prices. The CCFDs are being used by wealthy Chinese - namely those who have access to these credit facilities - to borrow against metal they own in order to buy more metal.

The metal being used here as collateral is stored in China, not in the LBMA banks. That’s an important point, because there is no fractional reserve lending going on. Instead these wealthy investors are making a strategic decision. They are using their physical metal stored in China to borrow national currencies, and are using the proceeds of these loans to buy more physical metal. That is the important point. They want as much exposure to physical metal as possible.

- James Turk via a recent King World News interview: