LOS ANGELES (Commodity Online): The implications of China increasing its gold reserves will be positive and even if purchases are small in the context of the Asian giant’s overall foreign reserves, it could still turn out to be significant for bullion market, according to Philip Klapwijk, Chairman of GFMS Ltd,

In an exclusive article to American Advisor,a quarterly newsletter of Goldline International, he said that the China buying will boost sentiments in bullion market. Klapwijk discusses the significance of China’s increase in its gold reserves and its potential positive effect on future gold prices at length in the article.

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“China’s announcement of official bullion purchases can be seen as a defining moment for the gold market,” wrote Klapwijk. “For gold prices the implications of this must be positive… Even if Chinese purchases, as seems very likely, turn out to be small in the context of the Asian giant’s overall foreign reserves, for the bullion market the quantities involved could turn out to be rather significant… A shift from nets sales on this scale to something close to ‘neutrality’ would be highly positive for gold prices, at the very least providing the market with a very solid floor and giving a major boost to sentiment and confidence in the yellow metal.”

“I think many investors will find Philip’s analysis of China’s diversification into gold and away from the dollar to be extremely significant, especially in light of the recent fall in the U.S. dollar and the generally positive signs in the gold market,” said Mark Albarian, President & CEO of Goldline. “We’re extremely honored to feature Philip’s article in our newsletter and look forward to the other articles that Philip will write in future issues.” (Courtesy: Businesswire)