“China will continue to purchase gold bullion to back its yuan,” says Lombardi. “Is the bull market in gold over? Not a chance.”
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New York, NY (PRWEB) May 07, 2012
If China is to back its currency, the yuan, it won’t use exchange-traded funds (ETFs) to do it, but rather gold bullion, according to Michael Lombardi, lead contributor to Profit Confidential.
Lombardi calculates that the demise of the gold bullion market is greatly exaggerated, as the demand for physical gold by China and other large investors will continue for some time.
In the article, Is the Bull Market in Gold Over?, Lombardi reports that the People’s Bank of China will, within the next year or two, establish the China International Payment System to settle cross-border trade and investments in yuan for countries and banks worldwide.
Today, the contracts for commodities like gold bullion that trade on the LME are settled in U.S. dollars, the euro, the U.K.’s sterling, or the Japanese yen. Lombardi believes that China wants the yuan added to the list of currencies it settles in, removing the sterling completely.
“These actions are irrefutable proof of China’s intention to make the yuan a reserve currency on par with the U.S. dollar and the euro,” says Lombardi. “China’s insatiable demand for gold bullion will continue to rise, as China has only a fraction of the gold bullion to back its currency compared to what the U.S. and eurozone have.”
Lombardi investigated the notion that the demand for gold bullion has fallen. “That statement is false,” says Lombardi. “Demand for gold ETFs is clearly falling; however, the demand for actual physical gold coins and gold bullion has increased significantly”
Lombardi believes that serious gold bullion investors may have been selling their ETFs to purchase physical gold coins and gold bullion.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.