Gold Crash Costs Russia and China $5.4 Billion in Just Three Weeks 8/6
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    Gold Crash Costs Russia and China $5.4 Billion in Just Three Weeks 8/6

    Gold Crash Costs Russia and China $5.4 Billion in Just Three Weeks



    Gold’s meltdown has cost Russia and China about $5.4 billion. That’s the value of the two countries’ gold reserves that has been wiped out in less than three weeks as prices slump to five-year lows, dragged down by expectations for higher U.S. interest rates and a stronger dollar.

    Bullion’s tumble is especially painful for Russia and China, the biggest buyers of gold over the past six years. China has expanded its holdings by almost 60 percent since 2009, while Russia more than doubled its assets and added reserves last month as prices fell another 6.5 percent.




    Neither the Greek debt crisis nor China’s stock-market rout has been enough to boost gold’s appeal as a haven. Higher rates curb bullion’s allure because it doesn’t pay interest, unlike competing assets such as bonds.

    “Holders of gold should be very concerned about the dislocation of gold’s status as a safe-haven investment,” Edward Dempsey, the chief investment officer at Pension Partners LLC in New York, said in a telephone interview. “The strength in the dollar continues to weigh on gold.”




    Nations have expanded bullion holdings in the past few years, a reversal from two decades of selling since the late 1980s.

    China on July 17 announced that it had boosted holdings to 1,658 metric tons, the first update on its hoard since 2009. Russia bought more gold in July and now holds about 1,275 tons, according to data from the International Monetary Fund. While they’ve been accumulating to diversify foreign-exchange reserves, investors have been selling.


    https://www.bloomberg.com/news/articl...st-three-weeks
    Last edited by Doodle Brain; 08-06-2015 at 02:30 PM.



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