Bloomberg imagines a wild price for gold if it ever formally backed Chinese yuan

Section:

Chinese Gold Standard Would Need a Rate 50 Times Bullion's Price

By Nicholas Larkin and Eddie Van Der Walt
Bloomberg News
Wednesday, May 20, 2015

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion's price now, according to Bloomberg Intelligence.

A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there's no evidence that the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published today. Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said.

Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote. Theoretically, to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal, they estimated. That's nine times the nation’s official holdings and about 6 percent of all the bullion ever mined globally. ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2015-05-20/chinese-gold-standard-...



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