Under conditions of low gold prices, as now, many market players are seriously studying the possibility of choice - whether this is a good time to buy (if there are prospect that high gold prices will back), or even sell (if the trend of decline is expected to continue).

Lawrence Williams is one of them who saw the possibility of gold prices will rise from the standpoint of economic policy, especially related to the latest developments of China and the deterioration of American relations.

Although the leaders of both countries are often met for a variety of negotiations, the hostility between the two can not be hidden. This feud started from the power of the currency issue, the Tibet issue, the Taiwan issue, human rights issues, Hacker, Google and many other issues that seem trivial but it can trigger a 'war' between them - at least the cold war.

The most serious among these issues is a step the U.S. to sell weapons to Taiwan worth U.S. $ 6.4 billion recently. China fury could push the country also sell or improve their weapons sales to countries deemed unfriendly to the United States. The worst scenario is to be a physical war broke out involving both the Territory of Taiwan or Korea.

Because of the war scenario is the possibility of physically small enough, then the more likely occur between the two is the focus of cold war politics and economics.

Although China is the mastery of technology and the economy was still under the United States, but the foreign exchange reserves in U.S. Dollars is very large can be a double-edged knife for the United States. When China decided to shift part their reserve of foreign exchange - for example, the impact can be tremendous for the value of U.S. $ that represents this American economic power.

This is related to the world gold price. When China's foreign reserves down U.S. $ his, what's the alternative? Euro, Yen and other currencies is not likely more attractive to China compared with U.S. $. So what is more interesting than U.S. $ for China?, Gold, of course, one of them.

Transitional China reserves of U.S. $ to gold little, gold prices may bounce because of three things at once. First due to increased demand by China itself, the declining purchasing power of U.S. $ which is used as a comparison of gold prices, and the third is the psychological effect that the market will follow-up gold hunt - to know China's gold hunt and left the U.S. $.