Home > Investing Articles > Okuma Group– Gold Unfazed By PBoC Rate Hike.

Okuma Group– Gold Unfazed By PBoC Rate Hike.

Todays Date: November 21, 2018

Okuma Group: Gold is not expected to be one of the commodities to be hit by China’s inflation fight.

“Okuma Group” analysts say they remain bullish on gold despite mounting concern that the war on inflation being waged by the People’s Bank of China could adversely affect the price of the precious metal.

Tony Archer, who heads up the Corporate Trading Services Division at the firm, told clients that gold had very much come into its own as a currency during 2010 and would retain its role as the ultimate store of value as long as governments around the world continued to pursue ultra-accommodative monetary and fiscal policies.

“We believe that metals like copper and iron ire may retrace their advancements as the Chinese authorities set about reducing inflation but given the country produced more than 340 tons of gold and imported large stocks in order to satisfy domestic demand, it’s fair to say that they’re not the only ones concerned about the devaluation of paper currencies,” Mr. Archer wrote in the latest “Okuma Group” client communiqué.

The PBoC raised its 1-year lending interest rate by 25 basis points to 6.06% on February 8 in its bid to temper economic growth. The Chinese government has actively encouraged its citizens to purchase precious metals as “a good investment” but there is little doubt that many Chinese still regard gold and silver as primary stores of value.

“Okuma Group” analysts say they expect the secular bull market in gold to run for some years in the absence of a non-inflationary solution to the debt problems faced by the developed nations. “Inflation has always been the weapon of choice for governments looking to get themselves out of debt and there is no reason why this time should be any different,” said one “Okuma Group” analyst.

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