It’s just a guess, but in the near future you shouldn’t be surprised to see an announcement of a gold-backed Chinese currency. They’ve been increasing the inventory of gold for too long to not do something with it and they would love to put a dent in America’s global hegemon.
China’s gold reserves stood at 1658 tonnes at the end of June, the central bank said on Friday, up 57 per cent from the last time it adjusted its reserve figures more than six years ago.
Despite the tonnage increase, gold now accounts for 1.65 per cent of China’s total forex reserves, against 1.8 per cent in June 2009.
The reduced ratio suggests China will increase its bullion purchases, but the market had focused elsewhere, traders said.
“The market’s saying China’s been buying gold but they bought a lot less than what they should have,” said Phillip Streible, senior commodities broker for RJO Futures in Chicago.
The United States, the biggest official sector gold holder, holds nearly 73 per cent of its reserves in gold.
The figures make China the world’s sixth largest official sector gold holder after the United States, Germany, the International Monetary Fund (IMF), Italy and France.
Speculation in the gold market has been rife in recent years over the size of official sector reserves in China, which is the world’s biggest producer of the precious metal and vies with India for the title of No.1 consumer.
China considers its gold holdings a state secret and does not report its holdings on a monthly basis to the International Monetary Fund as most other countries do.
It last adjusted its reserve figures in April 2009, when the level was lifted to 1054.1 tonnes from 600 tonnes.
Full article: China gold holdings jump 57pc, but buying not what it used to be (Sydney Morning Herald)
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