Gold prices have received a boost in the upward direction due to the weakening of the US dollar. The short-term projection for the bullion market is also purely bullish. Even the European stocks were slightly down owing to the uncertain status of banks in Italy. China and Russia who are both right at the top when it comes to Gold production are furiously building up on their Gold reserves, which is again very helpful for the Gold prices to be on an ascent.
In Russia’s case, they are building up their Gold reserves also because they want to lower their dependency on the US dollar as after the invasion of Crimea by Russia, there have been a hoard of sanctions that US is putting in place on Russia to exhibit their displeasure. So although Russia is building up the reserve to strengthen themselves against the US dollar, they are also pushing the prices for Gold up by trying to consolidate more and more Gold Reserves.
China’s attempt to hoard large quantities of Gold actually stems up due to a strategic reason. They want to equal or beat the weight of US dollar so as to make a successful bid to bring their currency “Yuan” into the mix of the International Monetary Fund. This again is fuelling the price for the Gold.
China’s total Gold reserves are generally presumed to be larger in size than declared partly because their Domestic Gold Holdings account is kept different from their International Gold Holdings account.
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