China buying gold and silver as hedge

“Often the biggest opportunity lays in the junior miners, the smaller still exploratory mining companies.”

Steven Orlowski
ETF Daily News

Gold is supposedly back and as appealing as ever. Of course it never went anywhere, but the constant barrage of gold bears has often dampened the outlook for what is likely to be a continuation of the global rally in gold that is now 12 years old.

Recent headlines have touted the increased commitment to gold by countries and investors alike. Of great interest to emerging markets investors is the revelation that China is stockpiling gold as a hedge against a falling US dollar.

However the China story is an obvious one. China owns a lot of US dollar-denominated debt and is therefore greatly exposed to the effects of a falling dollar. While extremists anticipate an overnight collapse of the dollar at the hands of the Chinese, this is not reasonable.

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