The Chinese are developing a gold-backed currency using the Yuan. They continue to purchase gold as quietly as possible. They are using some of their U.S. Dollars to convert to gold, a store of value without any attached liability. Last year China imported at least 1,000 tons of gold and they are not divulging size of their stockpile… yet.
They are quickly developing their financial market to handle world-class transactions, circumventing the U.S. Dollar. The U.S. Dollar as the world’s reserve currency is soon to be challenged. The unfunded liabilities of the U.S. assure us that the U.S. Dollar will continue its decline in value. America no longer has the resolve to deal with huge problems in its financial house.
Once the market responds to this plan, I expect gold and silver to respond accordingly based on the basic economic law of supply and demand, and enter their next phase of the bull market. The central banks have intervened in the paper market to suppress the rise of these metals. However, the market is larger than the central banks and their manipulation has an end in sight.