Interview with Zhenglianghao, managing director of World Gold Association Far East: in short supply, gold continues safe haven myth

Gold is still in short supply and, in the long run, the beauty of Gold's rise will continue.　　As for the impact of ETF overweight and selling on the gold market, Zhenglianghao that this is only a reference indicator and cannot completely determine the market situation. High-end dialogue under the financial crisis, a variety of investment jittery, but gold because of risk aversion, but constantly burst into a dazzling bright light, and even reached a record high of more than thousands of dollars. Is gold investment still a safe haven in the eyes of market focus? What is the significance of the central bank's increasing gold holdings in foreign exchange reserves? How much can the Gold ETF have an impact on the gold market?　　In Saturday, Zhenglianghao, managing director of the World Gold Association's Far East region, was interviewed by this newspaper in Shanghai to analyze and answer these hot questions.　　From the supply and demand to see the gold rising beauty will continue to the Southern Metropolis newspaper (hereinafter called the South): Gold prices from the long-term perspective is still the dominant position of supply and demand relations, the future of the supply and demand of gold is expected to change it? Zhenglianghao: From a supply perspective, the new underground gold mining in recent years has not changed much, the next 5-7 years is unlikely to have a new mine. Central banks should continue to sell in the next few years, but in recent years the central banks have not run out of 500 tonnes by agreement. As a result, the central bank's sell-off will not be substantial, and may even have a buying action.　　The third is the recovery of old gold, whose quantity fluctuates by the price influence. From the demand side, industrial demand has changed little, and investment demand will certainly continue to rise in future inflationary expectations. and jewelry demand, as long as India, China, Saudi Arabia, Turkey and other large use Jin can. If India and China do not have a clear decline in demand in the future, they can make up for the downturn in Europe and America.　　As a result, there should be a shortage of supply in general. South China: Risk aversion in the global crisis persists, combined with a weaker dollar and expectations of a two dip in the Chinese economy in the second half of the year, it is likely that money will again flow from equities, bonds and futures markets to gold.　　Seems to have multiple reasons to push up gold, do not know how you look at the future of gold? Zhenglianghao: The above analysis of supply and demand has been able to see that the overall gold is still in short supply, in the long run, the beauty of gold will continue to rise. As to what extent, various complex factors interweave, also can not accurately predict. At present, China's real gold and gold investment (excluding derivatives) has accounted for 10% of the world, is already the world's largest gold-producing countries (accounting for about 11%), jewelry consumption demand second only to India.　　The "Chinese factor" will have a greater impact on the global gold market in the future. The central bank's increase in gold is a bold lead in the South: Last month, the foreign exchange administration revealed that China's gold reserves have increased by 454 tonnes since 2003, now reaching 1054 tonnes, ranking fifth in the world. In addition to China, other central banks are also increasing their holdings of gold in their reserves.　　How to evaluate such a move in China? Zhenglianghao: For this evaluation, I quoteShian, chief executive of the World Gold Association, said: ' This is a bold and leading action, reflecting China's belief in the role of gold preservation and diversification of risk, should be able to give other central banks, especially in Asia as a model. In the recent Lujiazui Financial Forum, China Gold Group general Manager party secretary, CICC company chairman Sun Chaoxue also mentioned that China is now a small proportion of gold reserves, should reach 3%-5%, to 10% better. The future is certainly impossible to return to the gold standard, after all, gold is still limited.　　The dollar will not continue to be one, the euro, the yen and the renminbi should all be included, which would also help the renminbi play a bigger role in regional currencies.　　South: China has greatly increased its reserves of gold, since you support this practice, so what proportion is the most suitable for China? Zhenglianghao: From the top countries of gold reserves, the U.S. gold in the foreign exchange reserves accounted for up to 75%, the eurozone countries accounted for 60.8%, developed countries accounted for more than the general 40%~60%. Although China has increased some of its gold reserves, its gold reserves are still less than 2% per cent of the total reserve assets.　　China is moving in such a way that it can play a role in preserving and diversifying investment risks, and there is no scientific answer as to what level is appropriate.　　South: The current gold price is not low, now continue to support the purchase will be more risk? Zhenglianghao: The purchase of gold is not the main price, but choose the actual purchasing power.　　In the long run, no matter how the external conditions change, if the gold can guarantee the actual purchasing power, can be admitted at any time. Gold ETFs Add and sell are not afraid of the South: The market generally will be gold et f position changes as an important variable to assess the trend of gold prices. In the face of such a situation, analysts also say that its impact on the psychological level of the market is very large.　　What do you think of the Big Mac? Zhenglianghao: (Keep smiling) Gold ETFs are also relatively transparent data because they are required to be published by the exchange, and the market is naturally easy to use as a reference object. Gold ETFs are only part of the daily global gold deal, and they do not fully determine market conditions.　　If you really want to look at gold, then a lot of transactions around the world to pay attention, gold ETFs can only be a reference index.　　South: There is news that China is also brewing the launch of Gold ETF Fund, what do you think?　　Zhenglianghao: China should do this, once it succeeds, it will be a bright spot, because it gives investors a more prudent way of investing. Newspaper reporter Hau Yanghai reports