BEIJING (Commodity Online) : Despite its recent efforts to increase gold holdings, China the world’s largest gold producer, lags behind majors like US in gold reserves holding.
According to China's Ministry of Industry and Information Technology, country’s 1,054 tons of gold reserves account for a mere 1.6% of its foreign reserves and are only one-eighth the gold reserves held by the United States.
China produced 164.42 metric tons of gold in the first half of this year, 5.18 metric tons, or 3.25%, more than the same period last year.
The world's No. 2 economy had maintained a gold reserve of 600 tons for the six years prior to 2009. Market analysts see that China has a lot of room to increase its gold reserve.
The United States topped the list by holding 8,133.5 tons of gold, followed by Germany with 3,406.8 tons. The International Monetary Fund, Italy and France came next with 3,005.3 tons, 2,451.8 tons and 2,435.4 tons.
The amount of gold purchased by global governments increased by 203.5 metric tons in the first six months of this year, or 1.6 times that of the same period of last year, World Gold Council statistics show.
Russia led the pack by acquiring 181.5 tons of gold in the past 18 months, while South Korea, Mexico and Thailand bought 25 tons, 99.2 tons and 9.3 tons, respectively, in the past two months.
These countries' panic buying, which has contributed to the 20% rise in gold prices since November of last year, contrasts sharply to China's inertia, which boasts the world's largest foreign reserves.
An official from China's State Administration of Foreign Exchange said Chinese companies and people demand a large quantity of gold, and if the central bank were to compete with them for gold on the market, it would drive up the price of the precious metal to the detriment of the country's economic development.
Gold has proved to be one of the most attractive investment assets, especially amid the financial and economic crises over the past years.



