Those Sneaky Russians…
Two of the world’s biggest buyers of gold also happen to be America’s two biggest rivals on the global stage: China and Russia.
China’s on a gold bullion-buying spree. Asia’s biggest economy grew its gold reserves for a fourth month in a row in March, boosting its bullion reserves to 60.62 million ounces last month. This is up about 11 tons from February.
Over the past three months China’s gold-buying spree has added nearly 33 tons of the yellow stuff to the nation’s reserves.
And they may just be getting started…
The last big gold-buying spree by Beijing was back in 2015–16.
Back then, China was in the midst of devaluing its currency against the dollar to help boost exports. But at the same time the yuan slid lower, China was snatching up gold with both hands, boosting its bullion reserves almost every month for over a year.
If history is repeating again in 2019, then expect China’s appetite for gold to continue well into next year. In 2015–16 China nearly doubled its gold reserves, adding 25 million ounces total!
But China isn’t alone among leading emerging markets in its quest to acquire more gold. Russia is a big buyer too.
Russia has quadrupled its gold reserves in less than a decade, as Vladimir Putin is on a mission to break Russia’s dependence on the U.S. dollar. Moscow added 1 million ounces of the yellow metal to its reserves in February alone. That’s on top of 274 tons Russia purchased in 2018.
Are Beijing and Moscow trying to bring back the gold standard or simply dethrone the dollar?
The rumor is China and Russia are coordinating their gold purchases as part of a larger plan to break free of the dollar.
Even if they don’t actually peg their own currencies to gold, it’s speculated China and Russia may be investigating a gold-backed cryptocurrency to potentially use for trade instead of the almighty dollar.
Whatever the truth is, one thing is crystal clear to me: Gold is in big demand with heavy buying pressure worldwide. This of course comes at the expense of the dollar.
If the buck begins to slide in value as a result of these buying sprees, you can bet your last dollar that gold will go through the roof.
Bottom line: It wouldn’t surprise me to see gold surge to $1,500 an ounce or more in the next year. If that’s the case, gold mining stocks offer great opportunity for your money right now.
An easy way to play gold’s race to $1,500 with a single trade is the U.S. Global Go Gold and Precious Metal Miners ETF (GOAU).
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch