The Gold Bull Has Another 15 - 20 Years

According to this Bloomberg article China plans to continue to emphasise gold as an investment for another 15 to 20 years.

China’s trade in yuan-denominated gold investment products moves the currency closer toward global acceptance and the country should develop more of them, a central bank official said.

Pricing commodities in the currency “helps China’s goal to internationalize the yuan,” Wang Zhenying, deputy director- general of the Department of Financial Management at the Shanghai office of the People’s Bank of China, said today. “Gold is a good choice to have yuan trading.”

Full internationalization of the yuan will take 15 to 20 years, Dai Xianglong, chairman of China’s National Council for Social Security Fund, said last month. This doesn’t mean the currency will displace the dollar, which will remain dominant in the global currency system, he said.

“We have more than 30 trillion yuan worth of savings in deposits and the lack of investment products have contributed to Chinese investors going into mungbeans and garlic lately,” the central bank’s Wang said. “We can develop more gold products to attract investor demand.”