Buy Gold: Chinese regulators clamp down on gold trading

Gold Investment - 2 January 2012

The Chinese demand for gold must be huge if one considers the recent announcement by Chinese regulators that they are going to clampdown on gold trading in China. All gold exchanges operating outside the Shangai Gold Exchange (SGE) and the Shangai Futures Exchange (SHFE) are to be banned.

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Invest in precious metals today! Contact us for details.

The above news has led to a drop in both gold and silver prices, but Gold Investment is of the opinion that the market is overreacting. Yes, the real reason why the Chinese regulators intend to crackdown on unauthorized gold exchanges might not be, because they desire to put a stop to illegal and irregular activities, but we feel it’s beside the point. What really matters from a gold investor’s perspective, is firstly, the fact that demand for gold is clearly alive and kicking in China, and secondly, that due to the market’s negative reaction to the news, a window of opportunity was opened to buy gold at lower price levels. History has proven that if people are serious about gold ownership or investing in gold, nothing in this world will stop them from doing so, but themselves. This being written, even if it was not the case, the gold investor would have had nothing to worry about when comes to perceived clampdowns on gold trading in China. In fact, word is out that Chinese regulators have been talking about a crackdown on unauthorized gold exchanges for a while now, but it is highly unlikely that they will actually take action. The official announcement of a crackdown is sufficient to negatively affect the unauthorized gold exchanges. In fact, even if Chinese authorities do crackdown on the relevant gold exchanges, it will only serve to push them further underground, deeper into the flourishing gold black market that exists in China.

Invest in precious metals today! Contact us for details.

Invest in precious metals today! Contact us for details.

Gold Investment welcomes news that all gold exchanges operating outside the Shangai Gold Exchange (SGE) and the Shangai Futures Exchange (SHFE) are to be banned (or not). This doesn’t take away from gold’s intrinsic value, but do help to some extent to make gold cheaper to buy or acquire.