Posted in Trading on September 11th, 2017
After hearing rumors for years about China and its plans for gold and oil, one aim of China has recently been revealed. While oil has been low, the Chinese have been buying significant amounts of oil and investing in oil fields. Institutions in China own interests in a broad array of companies from the Asia-Pacific region to the Middle East. In addition, they seem to be interested in the rare Earth resources in Afghanistan – an area that the United States sees China as having a monopoly.
This year, China aims to release its own oil price, similar to what it did with gold and allow countries that it trades with to use gold as a currency swap. This means that a country like Russia or Saudi Arabia can obtain gold from selling oil, if they prefer gold over the Chinese Renminbi in a trade. This also explains part of the reason that China has been obtaining oil at a rapid pace, building their reserves while also building extra storage for reserves. In a sense, China has dumped the notion of investing in any government treasuries as of recent and has simply pursued commodities, especially energy.
This will carry significant developments for both oil and gold, as well as open huge investment opportunities. In an upcoming video in Retire Early With Cryptocurrencies, I’ll discuss these possible opportunities.