That’s the number you should concentrate on today, and for the next nine months.
It’s a specific number, to be sure. But it’s as important a number as you’ll see in today’s gold market.
And if you’ve been waiting for the next leg higher in precious metals, you’ll want to keep an eye on those all-important digits — especially in the next nine months. Here’s why…
“China’s gold imports from Hong Kong rose in February,” Bloomberg reported this week.
Net imports calculated by Bloomberg are a roundabout way of following the gold trail to China. Since the Middle Kingdom doesn’t report its gold total officially, the Hong Kong numbers are our best guess of the gold flowing into China’s borders.
According to the most recent monthly data, “Net imports totaled 109.2 metric tons [in February], compared with 83.6 tons in January and 60.9 tons a year earlier.”
The big takeaway here is that China is continuing to steadily accumulate gold. It’s something we’ve covered in these pages a bunch — in fact, I’m on record telling you that this will be the biggest gold story of the decade.
Simply put, if you’re interested in gold, you MUST be interested in the story developing out of China.
The numbers revealed in the chart above are huge. Just in that graphic alone — a two-year snapshot — China has more than doubled its gold holdings.
But the more important number is 5,430.48.
By my calculation, China is now “officially” holding 5,430.48 metric tons of gold.
Beyond the 1,054 metric tons that China owns up to holding, that’s an added 4,376 metric tons! That total easily places China as the second largest gold holder in the world (second only to the U.S. — if you believe Fort Knox has gold and not a stack of IOUs).
China isn’t slowing down, either. And as I’ll show you in a moment, this could be the next big catalyst to spur gold prices higher.
How soon? I believe we’re going to see this come to a point less than nine months from today.
First, though, let’s clear up some math — because we know the Chinese won’t do it for us!
So there you have it:
“But Matt, why do you keep referencing 2009?” you may ask.
The last time China announced its official gold holding was back in 2009 (April, I believe).
And the time before that was 2003, when they announced they had 600 metric tons.
If you follow the pattern, the next six-year gold announcement is due in 2015. Coincidentally, that’s the same year that China wants to have its currency (the yuan) fully convertible. (Fully convertible in this sense means their currency will be liquid and tradable just like all other major currencies, including the dollar.)
So 2015 is your huckleberry. That’s the year I believe China will splash the gold world with a huge announcement. An announcement that could light a fire under gold prices.
And regardless of the precise date we think they’ll announce their holdings, the real importance is the fact that the Chinese are HOARDING GOLD in a strategic concerted effort to strengthen their currency and put it on the world market to compete with other major currencies, including the U.S. dollar.
To sum it up, here’s a great comment I received from David H. on a past article about China’s gold:
“The Chinese have a 100-year plan; the U.S. has a 100-day plan.”
I couldn’t have said it better.
China is a strategic nation, much like Russia. Only instead of getting into a “hot” war with the U.S., they may go for a currency war.
While the U.S. continues to rack up debt and print U.S. dollars, keep an eye out for China’s big announcement. And in the next nine months, keep any eye on your favorite gold investments.
Keep your boots muddy,
Matt Insleyfor The Daily Reckoning
P.S. Now may be a good time to check out your favorite gold investments — the big miners and some of the small guys. For a look back at some of our favorites, simply sign up for the FREE Daily Resource Hunter, right here.
This article originally appeared in Daily Resource Hunter.
In reviewing your position in either silver or gold today, beware of panic selling.
Matt Insley is the managing editor of The Daily Resource Hunter and now the co-editor of Real Wealth Trader and Outstanding Investments. Matt is the Agora Financial in-house specialist on commodities and natural resources. He holds a degree from the University of Maryland with a double major in Business and Environmental Economics. Although always familiar with the financial markets, his main area of expertise stems from his background in the Agricultural and Natural Resources (AGNR) department. Over the past years he's stayed well ahead of the curve with forward thinking ideas in both resource stocks and hard commodities. Insley's commentary has been featured by MarketWatch.
I don’t have a 100 year plan but I’m 12 years into my 15 year plan. I started adding silver & gold 12 years ago (started a few months after the 9/11 crashes) to be set for my retirement in 3 more years. I didn’t like how the US was reacting to the attacks, turned out worse than I thought. Chins gold wasn’t even on the radar then. now they get it too.
“China is now “officially” holding 5,430.48 metric tons of gold.”
no it is not. the chinese communist party rulers are holding whatever gold they hold – and they are not holding it in china.
Since early July, there's been a sharp pullback in the prices of most major U.S. shale players. Is this the start of a long-term meltdown, or is this simply a great opportunity to "buy the dips"? Matt Insely explores, and offers four specific ways to play the trend. Read on...
Media coverage of the situation in Ferguson, Missouri has documented a very disturbing trend in local law enforcement... namely, why is a small town police force armed to the teeth with military equipment? Well, as Chris Campbell explains, it's all thanks to a little-known Pentagon agenda called the "1033 Program." Read on...
Few investments have yielded better returns for early investors than Bitcoin. But now that the price has stabilized, are there any gains left to be made? Today, Josh Grasmick details one investable Bitcoin service coming online that could still lead early investors to massive profits... and with less speculation and risk. Read on...
The Cold War introduced the world to a terrifying new phrase: mutually assured destruction. Thankfully the cold war ended without ever realizing this outcome. But the remnants of that "balance of terror" between the US and Russia still exist... and are beginning to surface in the financial sector. Jim Rickards explains...
'Tis the season for fall market predictions. But don't dust off that crystal ball just yet. Good traders don't try to predict when an important price move is going to happen - they just react when it does. However, as Greg Guenthner explains, forecasts can help you manage your risk/reward, as well as your non-trading portfolio. Read on...