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« Agnico-Eagle Mines Limited: Ready to Fly? | Main | Lunch with the Minister of Finance »
Wednesday
Dec012010

China’s First Gold Fund to Boost Demand for Gold

Map of China 02 Dec 2010.JPG


Scanning the air waves recently we have come across this interesting addition to the gold space in the form of a new fund based in China designed as a vehicle to offer access to the gold ETFs. This will offer the Chinese nation easy access to the already extremely popular gold funds and no doubt boost the demand for gold.


China approved the country’s first mutual fund that bets on gold prices, as inflation fears fuel demand for the precious metal. Lion Fund Management Co said on Monday that it won approval from the China Securities Regulatory Commission to launch the Lion Global Gold Fund, which invests in gold-backed exchange traded funds (ETFs) overseas. The fund offers a brand new way to invest in gold, giving investors access to ‘golden opportunities’ globally, the Beijing-based fund house said in a statement.

“The fund will be launched under China’s Qualified Domestic Institutional Investor (QDII) scheme, which invests Chinese money overseas,” the company said.

Chinese retail investors, who have no access to overseas gold markets, are rushing to buy gold coins, bullion and bars, as inflation fears, partly driven by loose monetary policies in the United States, are pushing up gold prices to historic highs. Taking advantage of rising interest in gold, fund managers are racing to roll out gold funds. E Fund Management Co, another fund house, is also waiting for regulatory approval to launch a gold fund under the QDII scheme



(Reuters) - China approved the country's first mutual fund that bets on gold prices, as inflation fears fuel demand for the precious metal. Lion Fund Management Co said on Monday that it won approval from the China Securities Regulatory Commission to launch the Lion Global Gold Fund, which invests in gold-backed exchange traded funds (ETFs) overseas.

"The fund offers a brand new way to invest in gold, giving investors access to 'golden opportunities' globally," the Beijing-based fund house said in a statement.


The company was established on Dec 9, 2003 with a register capital of RMB 110 million. The shareholders include China Foreign Economy and Trade Trust and Investment Co Ltd (40%), China New Era Co Ltd (40%), and Beijing Zhongguangcun Science Park Construction Co Ltd (20%).



And here is the catalyst: China has approved a fund that will invest in gold exchange-traded funds outside the country, opening the door to mainland China investors who face negative real interest rates on their bank deposits and want to hedge against inflation. Beijing-based Lion Fund Management Co. said they received approval from the China Securities Regulatory Commission on Monday to proceed with the fund. Next stop: gold much higher as the bubble mania is really unleased in such ETFs as GLD, UGL and PHYS.


Meanwhile back at the ranch during our knockabout sessions we have toyed with the idea of running an Accumulator whereby we make a trade and then use the total proceeds for the next trade and so on. So the stake and any profits are rolled into the next move, if you would like to comment on this idea, then please click here.

Over in the options trading pit the team have updated the progress chart to include closed trades, now 53 winners and out of 55 trades, having been stopped out of a trade with a profit of 41.84% made in just 8 days. We currently have a number of open positions which we are pleased to say are all in positive territory.

sk chart 19 Nov 2010.JPG



The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today?


Stay on your toes and have a good one.

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