Is uranium turning out to be the hottest commodity hotter than gold in China? China has been trying to amass gold reserves to emerge as the largest yellow metal owning country in the world. But China s craze for commodity investment does not just stop by gold alone. Uranium is one commodity that the dragon country is heavily investing in these days.
According to Thomas Neff of the Massachusetts Institute of Technology, China will double the amount of uranium it stockpiles this year, to 5,000 metric tons.
He said China is stepping up investments in uranium as part of its push to develop nuclear power on a massive scale, and state-owned companies have already been scouting uranium investments abroad.
Countries have been investing in uranium in the wake of new nuclear power plants that are coming up across the world. Combined with the fact that America is considering new nuclear power plants as well, uranium bulls have reason to be more excited these days.
Uranium prices are well below the levels of last year.
China has a relatively small position as far as gold reserves are concerned. The Chinese central bank--the People s Bank of China--holds only 1,054 tons of gold, amounting to just 1.2% of the country s gross domestic product. The large chunk of China's reserves--around 70%--are held in US dollars.
China has been nursing ambitions to step up its gold reserves in the last one year, driven by the declining value of US dollar that the Chinese central bank holds as foreign exchange reserve. China also continues to aggressively promote gold investment. Jewellery shops continue to sprout across Chinese cities, towns and rural areas.
A recent report from the World Gold Council (WGC) said that gold demand in India and China will continue to grow driven by jewellery demand, in spite of high local currency gold prices. In Q1 2010, India was the strongest performing market as total consumer demand surged 698% to touch 193.5 tonnes. In China, demand proved resilient; demand increased 11% in Q1 2010 to 105.2 tonnes.
Analysts like Neff say that China is China is aggressively stepping up investing in uranium reserves in US dollars, competing with gold as an asset in the process.
According to Thomas Neff of the Massachusetts Institute of Technology, China will double the amount of uranium it stockpiles this year, to 5,000 metric tons.
He said China is stepping up investments in uranium as part of its push to develop nuclear power on a massive scale, and state-owned companies have already been scouting uranium investments abroad.
Countries have been investing in uranium in the wake of new nuclear power plants that are coming up across the world. Combined with the fact that America is considering new nuclear power plants as well, uranium bulls have reason to be more excited these days.
Uranium prices are well below the levels of last year.
China has a relatively small position as far as gold reserves are concerned. The Chinese central bank--the People s Bank of China--holds only 1,054 tons of gold, amounting to just 1.2% of the country s gross domestic product. The large chunk of China's reserves--around 70%--are held in US dollars.
China has been nursing ambitions to step up its gold reserves in the last one year, driven by the declining value of US dollar that the Chinese central bank holds as foreign exchange reserve. China also continues to aggressively promote gold investment. Jewellery shops continue to sprout across Chinese cities, towns and rural areas.
A recent report from the World Gold Council (WGC) said that gold demand in India and China will continue to grow driven by jewellery demand, in spite of high local currency gold prices. In Q1 2010, India was the strongest performing market as total consumer demand surged 698% to touch 193.5 tonnes. In China, demand proved resilient; demand increased 11% in Q1 2010 to 105.2 tonnes.
Analysts like Neff say that China is China is aggressively stepping up investing in uranium reserves in US dollars, competing with gold as an asset in the process.
