Gold opens with gain on China easing requirements
http://bit.ly/xr6kwX
By Jeremy Holcombe Contributing writer for Goldco Direct and End the Lie [caption id="attachment_38657" align="alignleft" width="225" caption="HK Bank of China Tower (Photo credit: Wikimedia Commons)"] [/caption] China eased some of its banking requirements yesterday, and that was partly the reason that gold started the week off higher than it ended last week. If you read our articles a lot, you will know that I said gold would have a strong week this week , and it looks like at the very least we are off to a good start. Another driving factor of the gold spike were markets anticipating that European finance ministers would approve another loan for Greece. “The metals and markets in general have been boosted following the cutting of reserve ratios in China,” William Adams, head of research at FastMarkets.com, wrote in emailed research. “Given the emergence of more quantitative easing the weight of money is likely to remain a bullish factor so although we do not feel the fundamentals justify these high price levels, it is likely to take a catalyst to trigger a more meaningful correction,” he added. The policy easing in China allowed for riskier appetites for investors. Saturday, the People’s Bank of China said it would reduce the amount of money banks need to hold in reserve to spur lending and increase liquidity. This is a nice little piece of news for investors both in China and in other places. Opening up a riskier appetite for investing can be good and bad. Good in the fact that it will drive prices and continue to make gold and silver spike in price. Bad in the fact that if the investors are not smart, they can still invest poorly and end up costing themselves a lot of money in the long run. Investors also continue to have faith and believe that all of the good news coming out of Greece will eventually become reality. Finance Ministers in Greece are continuing to say that a debt deal is agreed upon and that Greece is about to sign. However, as we all know, Greece has yet to sign anything, and continues to procrastinate and allow themselves to linger on the precipice of bankruptcy. Hopefully we will have a deal signed before this week is done, but it would not surprise me if there was still no signed deal before Friday, as that has been the way of things over in Greece for the past several months. However, a lot of good talk continues to pour out of Greece so hopefully we will see something signed soon. [Editor's note: I see the lifting of the reserve requirements to be a bad sign for China's economy. This type of activity is what allows the Las Vegas-style investing practices that have so horrifically damaged the American economy. With lowered reserve requirements, investors can leverage their money to an absurd degree, to the point that it has the real possibility of collapsing economies. If the Chinese are smart enough, they might be able to keep it under control, especially after seeing what such practices did to the economies of the United States and Europe.] The above article is for informational purposes only and is not a solicitation by End the Lie or Goldco Direct . It is the commentator’s opinion only and not intended for investment recommendations, and does not necessarily reflect the views of End the Lie or Goldco Direct . Any references to outside sources are believed to be accurate. Past performance is not a guarantee of future results. All commodities involve risk. Investors should consult their financial adviser before making any investment decisions.