As Long Yuan Devalues, Gold Bugs Will Be Happy: Bloomberg's Hoffman | Kitco News
News out of China continues to dominate headlines Friday, Kitco News speaks with Ken Hoffman of Bloomberg Intelligence to talk about his latest trip to the country. According to Hoffman, sentiment in China continues to be bearish. “Everything is falling off a cliff…everything right now in China is in decrease mode [and] we actually think their copper demand, for the first time in 30 years, will actually decline by 2-4%,” he tells Daniela Cambone. He explains that as the country shifts from an industrial-based economy to a more IT-based economy, old businesses — such as steel, copper, cement — are going to be hurt. Hoffman also comments on the recent surprise move by the Chinese central bank to devalue its currency, the yuan. “One of the biggest points that China has right now is make the yuan more global,” he notes, adding that the weakening of the yuan is helping gold. “If China is going to devalue its currency, that’s going to be very positive for gold demand in China, the world’s largest gold buyer,” he says. Commenting on the recent release of gold reserve holdings by the People’s Bank of China, Hoffman says that even people in the country don’t believe the numbers that were released. “There is a way central banks can sort of hide gold [holdings],” he says. However, he notes that gold continues to play a very important role in the country’s currency strategy. China still has a ‘strong and sincere interest in gold,’ he adds. Kitco News, August 21, 2015.
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