China’s purchase of an overseas gold mine has gold investors nodding.

November 11, 2011 – Most investors keep a tab on China’s activities. At least, the smart investors keep an eye on China. So as Wall Street continues to be occupied, China’s purchase of an overseas gold mine has gold investors nodding. China and India already account for about 85 per cent of the world’s annual mined supply of gold, producing about 2,000 tonnes a year.

So, then, why is China, already the world’s largest gold producer seeking to own gold mines abroad? The megalithic economy is well known for taking a very long view of the future and China’s investments around the world are legendary, partly because it is so difficult due to governmental regulations to invest in or hold assets abroad.

When China makes a move, it therefore does so with a multi-decade view of a return on its investment. While there are talks between China and Canada for purchase of gold mining operations in North America, the likelihood of an attempt to corner the market is nil and if possible would not quite explain China’s choice point.

Indeed, China’s focus on strategic minerals is legendary and accounts for a lot of its investment in the continent of Africa, but the country’s fifty year plan probably reveals a lot more about the future of gold and silver investing.

To be clear, gold and silver prices will not immediately reflect a decision by the Chinese to invest in gold mining operations abroad, but it is a clear and strong signal as to the progression of gold and silver investing over a very long term in the future.

This kind of activity is very reassuring to gold and silver investors as the long term trends for bullion prices are a bit more secure. One can also look to gold and silver more confidently knowing the Chinese economy is counting on them as a part of its portfolio. It’s a good time to own gold and silver and a good time to get in now.

Shannon King

Senior Staff Writer –

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