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Last Updated : 08 August 2011 at 16:00 IST
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China still lags behind others in gold reserves

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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.

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Christopher Neal Wyatt  Posted On : Aug 08, 2011 7:51 PM
There are two points that deserve to be made here. First, the official gold reserve figures from China represent only Chinese government holdings, while not including private reserves, held by banks and individuals within China. The Chinese government has been coaching its citizens to buy physical gold and silver bullion as an investment, and they have been, in droves, over the past decade. As China is the world's most populous country, the total volume of gold and silver held by private banks and individuals is likely to be much greater than the official reserves held by the government there. Secondly, the situation in the U.S. is markedly different. While the Treasury claims to hold 8,000 tons of gold at Fort Knox, these gold reserves have not been audited in decades. As a result, there is quite a bit of suspicion here as to the actual status and location of that gold bullion. Moreover, contrasted with China, physical gold and silver investment by the general public here is very, very small. Most private U.S. dollars which have been invested in gold and silver markets, are actually invested in only 'paper' gold and silver markets, like ETF funds. These funds are largely made of just smoke and mirrors, designed to increase volatility, and limit prices generally, while increasing profit for Wall Street insiders like HSBC, and JPMorgan Chase, at the expense of the American economy. As bonds, currencies, and equities continue to crash in value worldwide, individuals everywhere are increasingly demanding physical gold and silver bullion as a store of wealth. Consequently, the fraudulent paper markets which have prevailed for so many decades in the U.S. will surely come crashing very soon, as the investment firms will ultimately be unable to make physical delivery of anything more than 1% of the gold and silver which is said to exist on their books. For a country like China, which is focused on both physical gold investment and production, the strength of their position may ultimately prove much greater than is commonly assumed. superiorbullion/news.html
Christopher Neal Wyatt  Posted On : Aug 08, 2011 7:49 PM
There are two points that deserve to be made here. First, the official gold reserve figures from China represent only Chinese government holdings, while not including private reserves, held by banks and individuals within China. The Chinese government has been coaching its citizens to buy physical gold and silver bullion as an investment, and they have been, in droves, over the past decade. As China is the world's most populous country, the total volume of gold and silver held by private banks and individuals is likely to be much greater than the official reserves held by the government there. Secondly, the situation in the U.S. is markedly different. While the Treasury claims to hold 8,000 tons of gold at Fort Knox, these gold reserves have not been audited in decades. As a result, there is quite a bit of suspicion here as to the actual status and location of that gold bullion. Moreover, contrasted with China, physical gold and silver investment by the general public here is very, very small. Most private U.S. dollars which have been invested in gold and silver markets, are actually invested in only 'paper' gold and silver markets, like ETF funds. These funds are largely made of just smoke and mirrors, designed to increase volatility, and limit prices generally, while increasing profit for Wall Street insiders like HSBC, and JPMorgan Chase, at the expense of the American economy. As bonds, currencies, and equities continue to crash in value worldwide, individuals everywhere are increasingly demanding physical gold and silver bullion as a store of wealth. Consequently, the fraudulent paper markets which have prevailed for so many decades in the U.S. will surely come crashing very soon, as the investment firms will ultimately be unable to make physical delivery of anything more than 1% of the gold and silver which is said to exist on their books. For a country like China, which is focused on both physical gold investment and production, the strength of their position may ultimately prove much greater than is commonly assumed. superiorbullion/news.html
Christopher Neal Wyatt  Posted On : Aug 08, 2011 7:49 PM
There are two points that deserve to be made here. First, the official gold reserve figures from China represent only Chinese government holdings, while not including private reserves, held by banks and individuals within China. The Chinese government has been coaching its citizens to buy physical gold and silver bullion as an investment, and they have been, in droves, over the past decade. As China is the world's most populous country, the total volume of gold and silver held by private banks and individuals is likely to be much greater than the official reserves held by the government there. Secondly, the situation in the U.S. is markedly different. While the Treasury claims to hold 8,000 tons of gold at Fort Knox, these gold reserves have not been audited in decades. As a result, there is quite a bit of suspicion here as to the actual status and location of that gold bullion. Moreover, contrasted with China, physical gold and silver investment by the general public here is very, very small. Most private U.S. dollars which have been invested in gold and silver markets, are actually invested in only 'paper' gold and silver markets, like ETF funds. These funds are largely made of just smoke and mirrors, designed to increase volatility, and limit prices generally, while increasing profit for Wall Street insiders like HSBC, and JPMorgan Chase, at the expense of the American economy. As bonds, currencies, and equities continue to crash in value worldwide, individuals everywhere are increasingly demanding physical gold and silver bullion as a store of wealth. Consequently, the fraudulent paper markets which have prevailed for so many decades in the U.S. will surely come crashing very soon, as the investment firms will ultimately be unable to make physical delivery of anything more than 1% of the gold and silver which is said to exist on their books. For a country like China, which is focused on both physical gold investment and production, the strength of their position may ultimately prove much greater than is commonly assumed.