Is China buying gold?

Steve Sjuggerud in his Daily Wealth lays out a very credible scenario in which China passes up IMF gold so as to avoid driving up the price while snapping up gold miners around the globe.

Instead of buying physical gold in the open market (where China would be the 800-pound gorilla in the room), China plans to buy gold mines around the world.

An official from the China Gold Association told The China Daily that rather than buy gold from the IMF, China would buy gold directly by buying gold mines "abroad."

If true, it's not hard to imagine this pushing up prices of both gold and gold stocks.  Before you load up on gold shares though, you might want to look at the chart for GDX (Market Vectors Gold ETF) in 2008.  In that meltdown, gold stocks were crushed like all the rest. 

Do I own gold stocks now?  Absolutely.  Am I "all in?"  Not a chance.



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