LONDON, 19 November 2010 ? Comments from BullionVault ? the professional gold-ownership service for private investors ? feature today in a report on China's new inflation-fighting policies published by TheStreet.com.
Reporting that "Gold prices flat-lined Friday as China's central bank raised the amount of money banks must hold in their reserves by another 50 basis points," senior producer Alix Steel notes that traders had instead been expecting a rise in Chinese interest rates.
China is now the world's No.2 private gold consumer, and much of its growing demand has been linked to negative real rates of interest ? after inflation ? paid on cash. China would have "to raise interest rates by a long way before it really makes a difference for cash savers,"TheStreet.com quotes Adrian Ash, head of research at BullionVault.
Thus, any panic over Chinese demand amongst Western investors "is unfounded".
You can read TheStreet's full report here...
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