China has been pressing the International Monetary Fund (IMF) to add the renminbi to the elite four-currency basket that comprises the IMF’s so-called “special drawing rights” (SDRs). If the IMF agrees, the renminbi would join the big leagues of reserve currencies – right there alongside the euro, yen, pound… and U.S. dollar.

China has been pressing the International Monetary Fund (IMF) to add the renminbi to the elite four-currency basket that comprises the IMF’s so-called “special drawing rights” (SDRs). If the IMF agrees, the renminbi would join the big leagues of reserve currencies – right there alongside the euro, yen, pound… and U.S. dollar. 

 Asian gold buyers are more than happy to load up on every ounce that Western investors are unloading… As gold trading volumes grow in Asia, and those volumes represent physical metal rather than mere paper claims, the balance of power in the gold market will likely shift from the West to the East… No longer will New York gold selling squelch Asian gold buying. But rather, Asian buying will set the tone in the gold market.
Already, the Shanghai Gold Exchange has become the world’s largest physical gold exchange. This recent achievement could well signal an important shift in the gold market.

There’s one last thing you should know about China’s gold-buying binge and its new Shanghai gold fund. These maneuvers are calculated and tactical! In fact, Chinese officials have openly stated that launching the new Shanghai gold fund was part of a plan to “increase the influence of the renminbi in gold pricing.”

But clearly, China’s plans for the renminbi do not end there.

As I have pointed out in these recent editions of The Non-Dollar Report, “A Tsunami of Gold Buying” and “China Takes Aim at the U.S. Dollar,” China’s recent gold buying is part of a grand plan to establish the renminbi as one of the world’s reserve currencies, alongside the dollar.

China has been pressing the International Monetary Fund (IMF) to add the renminbi to the elite four-currency basket that comprises the IMF’s so-called “special drawing rights” (SDRs). If the IMF agrees, the renminbi would join the big leagues of reserve currencies – right there alongside the euro, yen, pound… and U.S. dollar.

Gold plays a key role in China’s hopes for the renminbi. Building a massive gold reserve would lend instant international credibility to the renminbi as a reserve currency. Additionally, Bloomberg Intelligence has reported that the People’s Bank of China may have tripled holdings of bullion to 3,510 metric tons since it last updated them in April 2009. If that’s true, China would possess the world’s second-largest gold reserve, after the U.S. And some sources say accumulated Chinese gold holdings are even greater than that!

So with all this Chinese buying, why hasn’t the gold price moved higher during the last couple years? The short answer is that gold selling in the Western financial markets is overwhelming gold buying in the Eastern markets.

My colleague Eric Fry examined this phenomenon a couple months ago. In a column titled “The Stealth Bull Market in Gold,” Eric observed:

Since hitting its all-time high in September 2011, gold has consistently traded to the upside during Asian trading hours, but to the downside during New York and London trading hours.

In other words, for nearly four years, gold has been rising in the East and setting in the West. The cumulative results of these divergent trends have been nothing short of incredible.

During Asian trading hours, gold has gained a cumulative $738 an ounce since September 2011. But during New York and London trading hours, gold has racked up a cumulative loss of $1,177 per ounce…http://freemarketcafe.com/2015/05/chinese-buy-signal-shanghai-gold-exchange/