Gold Could Shoot Through $1,000 if China Shifts Away From U.S. Treasurys

29 June 2009  Fox Business

Gold could go well above $1,000 an ounce in the next couple of years, according to some people bullish on the metal, who say China could boost the yellow metal's price significantly if it takes the policy actions one of its research officials is advocating.

A Chinese academic with ties to the Chinese Communist Party says the People's Republic should buy more gold and diversify its nearly $2 trillion in foreign exchange reserves away from U.S. Treasurys.

Li Lianhzong, director of the economic bureau at the party's China Central Policy Research Office, made the comments at a forum in Beijing that also covered the broader topic of China’s currency on the world financial stage.

Li was cited by Dow Jones Newswires as saying China needs to increase the value of its foreign exchange reserves -- the source “from which we create our fortune.”

U.S. land and energy products should be at the top of China’s shopping list, according to Li, who also says China should be accumulating more gold to hedge against the risk of a falling dollar which would diminish the value of its U.S. Treasury holdings.

http://www.foxbusiness.com/story/markets/commodities/gold-shoot--china-shifts-away-treasurys/