China gold reserves jump 57%

The People’s Bank of China on Friday published figures on its gold reserves for the first time since 2009.

The PBOC had previously reported its reserves at 1,054.1 tonnes. 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.

Back in April we wrote that “The Mystery Of China’s Gold Holdings Is Coming To An End” as a result of China willingness to add the Yuan to the IMF’s SDR currency basket which would require the disclosure of China’s gold holding ahead of an International Monetary Fund meeting on SDR composition which may be held in October.

The channels include domestic scrap gold, production storage and trade in domestic and overseas markets, state-run Xinhua news agency quoted the central bank as saying.

“China has ambitions to create a global reserve currency to challenge the hegemony of the US dollar DXY, +0.17% and fill the void created by the declining holdings by central banks of the euro EURUSD, -0.2483% ” Norman said.

The increase, which amounts to 604 tonnes, worth $21.964 billion at today’s prices, would help guarantee the security, liquidity and value of China’s worldwide reserves, it said.

In 2014, China’s gold reserves stood at 1054 tonnes. “It was felt by many that they would be more open, and that would mean revealing any increase in their reserves”, Societe Generale analyst Robin Bhar said.

By way of background, the reason why everyone has been so focused on Chinese official gold holdings is that there has been no official update to the gold inventory of the world’s biggest nation, which have been fixed at 33.89 million oz since April 2009, a little over 1000 tons.

“As a country with the world’s largest economy by some measures, one would have expected they would be well north of the German figure really”.

Platinum fell below the key $US1000-an-ounce level for the first time in more than six years while palladium extended losses to hit its lowest since November 2012.