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Lawrence Williams
The news today that the state-owned Industrial and Commercial Bank of China (ICBC), the China's largest bank by assets, is to co-operate with the World Gold Council to help promote gold in China, is but the next sign that the Chinese hierarchy is continuing to push gold as an investment to its general population.
Mineweb readers will recall that we broke a story about the state-owned Chinese banks promoting the purchase of gold and silver just over a year ago - China pushes silver and gold investment to the masses - and that this effectively meant that the Chinese state would do its utmost to maintain the gold (and silver) price at a decent level so its citizens, who it had persuaded to buy the precious metals in the first place, did not lose out to the vagaries of the market. Given that state entities will have been understood to be leading the ever-wealthier Chinese middle classes in this direction the state is hardly likely to want to ‘lose face' through a declining gold price making an influential, and growing, group of its citizens poorer as a result. And China is certainly, as we have pointed out before, in a strong position to control the gold price should it wish to do so to protect itself.
Indeed given the strong current resistance to a downtrend in gold around the $1,100 level, and the big purchase in the SPDR Gold Trust ETF by the Chinese sovereign wealth fund, CIC, this support for the gold price may already be under way.
China still pushing gold to the people as ICBC and WGC announce co-operation agreement
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