Published Date : Nov 10, 2015
In July this year, China declared that its gold holdings had increased by 57% since 2009. The People’s Bank of China has now revealed gold reserves worth 1,722.5 metric tonnes. The PBOC continues to increase gold bullion as it aims to diversify its foreign exchange reserves worth US$3.53 trillion and transform yuan into a global trading and reserve currency. Gold prices increased by 2.5% in October but dropped by 5% last week due to speculations regarding a possible Fed interest rate increase.
China has surpassed Russia as the world’s fifth-largest national gold reserves. As official sector gold holder, China ranks sixth, preceded by the United States, Germany, the IMF, France, and Italy. According to the World Gold Council, the United States has around 73% of its foreign reserves in gold. It tops the list of official gold sector holder nations.
By the end of October, China’s gold reserves stood at a valuation of US$63.261 billion. However, gold still accounts for less than 2% of total foreign exchange reserves in China worth US$3.53 trillion. In recent years, huge volumes of gold have been imported through Shanghai and domestic production of gold in China has surged. China has now emerged as the largest producer of gold across the globe. In order to diversify currency risks, China is expected to further focus on gold buying. Apart from the PBOC, the China investment Corporation (CIC) is also accumulating gold bullion and is acquiring gold mines from Africa and South America. If the combined holdings of the CIC and PBOC are added, China might be the second-largest gold bullion holder after the U.S.