hinese Monetary Policy China represents a growing portion of gold and silver demand, and the country is a popular investment destination for foreign investors. While Chinese citizens are stocking up on gold and silver as an inflation hedge to negative real interest rates, the Chinese central bank will soon be forced to act in order to keep inflation in check. Currently, one-year rates on the Chinese mainland are 2.5% while inflation rises toward highs at 5.1%. With these fundamentals at play, the Chinese can effectively borrow cash to store in gold and silver, pocketing the difference between the cost of borrowing and inflation. Investors are calling for an increase in the central bank's target interest rate, which could, at least for a short period of time, stifle domestic physical metal demand. This is a story that should be followed closely. http://www.kitco.com/ind/Lewis/dec202010.html
