Insider Peak at China Gold Strategy

On the heels of a statement from Yi Gang, Director of China's State Administration of Foreign Exchange, suggesting China's interest in expanding its gold reserves is minimal, signs of a new strategy are beginning to surface.

This latest article announces a deal between Chinese company, Henan Jinqua and Citigold, one of Australia's largest gold exploration companies, to initiate a joint venture to expand the Charter Towers Mine.Directly from the article we read. . .

Citigold chief executive Mark Lynch says it's proof China has a large interest in the precious metal.

"Gold is important to the Chinese and to the Chinese culture, so I guess it's just another step along the way, I suppose," he says.

In time this will have a direct effect on gold supply and gold demand.The Chinese are clearly buying the mine to divest out of dollars and to keep their share of the gold they bring out of the ground.That, ultimately means less supply in the face of growing demand.

This is not the first report we have that China is listening to Yi Gang's gold recommendations.China is actively pursuing ownership of other mines as well.The race to own gold is on before China owns all the mines.

Keep your gold hot line number handy.