China’s central bank may have secretly bought 300t of gold this year

Gold movements by central banks are closely watched by the market. None more so than the People’s Bank of China.China’s gold reserves are officially put at 1,054 tonnes – a number officials haven’t updated since 2009.

Rumours about massive purchases – up to 6,000 tonnes according to some estimates – continue to circulate as the country seeks to diversify its massive foreign exchange reserves which are mostly held in US dollars.

Gold makes up little more than 1% of the country’s $3.6 trillion in reserves compared to more than 70% for the United States which holds 8,166 tonnes of gold in vaults.

Philip Klapwijk of Precious Metals Insights told Businessweek China may have bought 300 tonnes of gold in the first half of this year:

“The probability is that there’s some form of official purchases that have not yet been reflected in the monetary gold reserves,” Klapwijk said, referring to bullion declared to the International Monetary Fund. “Undoubtedly, that’s provided support for prices, which could have been weaker.”

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