China’s Secret Gold Holdings Increasing, Says Bloomberg
With The People’s Bank of China having tripled its gold stockpile since April 2009, the Bloomberg Intelligence estimates the nation’s gold stockpile to be 3,510 metric tonnes, second only to the United States’ 8,133.5 tons.
That figure is nearly triple the 1,054 tons of gold the nation reported in 2009, and was calculated based on trade data, domestic output and China Gold Association figures.
Analysts believes China has acquired gold to make the yuan a more competitive option against the US dollar.
The People’s Bank of China Governor Zhou Xiaochuan made it his unspoken mission to turn the yuan into a globally competitive currency, as well an IMF reserve currency. China has thus implemented numerous economic reforms.
The Dollar is the most popular reserve currency. It accounts for 63 percent of world central bank holdings, with the euro coming in second at 22 percent.
The yuan was the seventh most used currency worldwide in SWIFT payments. As GoldSeek writes,
Enter the Dragon. China’s push to challenge U.S. dominance as the global economic superpower and to challenge the dollar as a global reserve currency involves gold – “a lot of gold.”
China may soon make public that it has quietly accumulated a massive hoard of gold in recent years. This was done in order to bolster their bid to have the yuan included in the basket of currencies that make up the IMF’s Special Drawing Rights (SDRs) according to an article by Bloomberg.
This is something Jim Rickards, ourselves and many analysts in the gold sector have said would happen for some time. The People’s Bank of China’s (PBOC) quiet ongoing accumulation of gold is something we frequently cover as we believe it is an important demand factor in the market that is largely ignored by most analysts and in most coverage of the gold market.