PDAC: Goodman reveals why China is building up its physical gold reserves

Peter Kennedy Peter Kennedy, Stockhouse
12 Comments| March 3, 2014


TORONTO - Canadian financier Ned Goodman says China is increasing its stocks of physical gold with the intention of eliminating the U.S. dollar as the world’s reserve currency, a move that would be favoured by Russian President Vladimir Putin.

“Mr. Putin is not a best friend of the United States,’’ said the Dundee Corp. Chairman during a speech to the Prospectors and Developers Association of Canada convention in Toronto on Monday.

“He would be in favour of eliminating the U.S. dollar as that reserve currency.”

A high profile asset manager and mine financier, Goodman said China has increased its physical gold reserves by 32% in the past year. “I think that the intention is to eliminate the U.S. dollar as the world’s currency,’’ he said. “It means that the U.S. is possibly bankrupt.

As Goodman is a renowned gold bug, it is hardly surprising that he would express such a view.

But one gold analyst said it may suit China’s purpose to have large reserves of gold. “I think they want to internationalize the Yuan,’’ said Dundee Capital Markets analyst Martin Murenbeeld. “They might say that if you don’t like our currency, then you can exchange it for gold,’’ he said.

However, Murenbeeld said it’s important to note that although China has increased its gold reserves to 1,054 tonnes, the yellow metal amounts to less than 1% of its foreign exchange reserves, which currently stand at US$4 trillion.

At current levels, Murenbeeld also said China’s reserves are still dwarfed by U.S. gold reserves which currently stand at 8,300 tonnes.

Still, if China were to try establish the Yuan as a reserve currency, that would definitely be an issue for the United States, he said.

Meanwhile, as debate raged over the Russian invasion of the Crimea, the price of gold was off 73 cents to US$1,349.77 an ounce.

Tags: GOLD

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dabbler1
US gold reserves are probably paper certificates just so much confetti in the wind...
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March 5, 2014
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valueplaysonly
the rumour is fort knox has no gold in which case the american dollar will be worthless
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March 3, 2014
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BREAKtheCOMEX
China is the largest gold producer in the world. Last year they produced 400 tons. Does anyone believe they only have 1054 tons. 15,000 sounds more realistic.
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March 3, 2014
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BREAKtheCOMEX
China is the largest gold producer in the world. Last year they produced 400 tons. Does anyone believe they only have 1054 tons. 15,000 sounds more realistic.
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March 3, 2014
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StockExpertPro
Ned Goodman's company Dundee Corporation is heavily invested in Woulfe Mining listed as V.WOF on the TSX Venture Exchange. It seems odd to me that he doesn't mention this tungsten stock. Goodman and his company Dundee have been quietly trying to acquire large percentage of Woulfe Mining stock. I really like Woulfe Mining as a long term investment because of the enormous potential associated with the Sangdong tungsten project. The Sangdong deposit has the potential to supply Woulf...
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March 3, 2014
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rborhi
What about Bitcoin?
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March 3, 2014
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bobwiles1
Jim Willie projects that China has 15,000 tons of gold. China may release a statement next month about having only 4,000 tons which is not to be believed.
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March 3, 2014
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goldenfitness
It is possible for a Country to Police the World with no Monetary help from anyone else without running into financial problems.
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March 3, 2014
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Majormac79
This report only uses China's official announced reserves. The volume of gold entering China indicates they should have added to over 5k tons. Some say much more.
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March 3, 2014
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Realmoneyguy
I get a kick out of these guys that think the US has 8300 tons of gold. That gold is long gone and to boot the gold they are holding for others (mainly Germany) is long gone too! I' m also sure China has much more than 1050 tons, probably over 5000 tons now, maybe more. So which currency would you take? A Ponzi backed by nothing one or a currency that is backed and convertible into gold? I know which one I'm taking! Lol
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March 3, 2014
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