A new projection from Bloomberg has suggested that should China take on a gold standard then the metal would explode and go over more than $60,000 per ounce and would back the yuan currency.
The report said that should China take it on it would need an exchange rate of around $64,000 an ounce, which would be 50 times the price of the bullion it is now. Along with this in order to be able to make the exchange rate of a single ounce of the gold for each $64,000 the country would require around 10,000 metric tons of gold. This means that’s about 9 times the official holdings of the nation and 6% of all gold that has been mined around the world.
Of course the likelihood of China doing so has been downplayed, but on the other hand they have been stockpiling gold along with beefing up its gold based investments. It is also the biggest gold miner around the globe and sponsors mining projects in South America, Africa and Australia.
China last told us about the official gold holdings in 2009 and this was 1,054 metric times but a lot of time has passed since then. Estimations have it at somewhere between 3,000 tons and up to 30, 000 tons. At the moment the biggest sovereign holdings is in the US and they have 8, 133 tons.
While it would be almost impossible for China to have a traditional gold standard, Beijing on the other hand could have a gold standard and this may send the price of bullion sky high.