China’s gold reserves touched a record 1,658 tonnes by June, 2015, zooming almost 60 per cent since April 2009, the central bank of the world’s largest gold producer said today.
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In 2014, China’s gold reserves stood at 1054 tonnes. As part of this process, China would need to fully declare its gold reserves; in that sense the timing is as expected – its just the amount that makes no sense.
The United States, the biggest official sector gold holder, holds almost 73 per cent of its reserves in gold.
China considers its gold holdings a state secret and does not report its holdings on a monthly basis to the global Monetary Fund as most other countries do. This is to say that China may be adopting the reverse of the United Kingdom policy of the late 1990’s where it telegraphed in advance to the world its intentions to sell most of its gold reserves – thereby prompting a fall in prices to a 21 year low… thank you Gordon Brown.
Gold now accounts for 1.65% of its total foreign exchange reserves, a smaller percentage than the last update when it was 1.8%.
A WikiLeaks cable in 2011 cited a Chinese newspaper as saying that the country’s large gold reserves would be “beneficial in promoting the internationalisation of the RMB”.
Some analysts said the central bank’s unusual announcement may be a move to seek global recognition of the renminbi, as now the global Monetary Fund (IMF) is considering including the currency in its special drawing rights (SDR) as an official reserve currency in addition to the U.S. dollar, the Japanese yen, the euro and the British pound.
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“This (figure) was not unexpected”. “The market was looking at a figure north of 2000 tonnes”.
