GOLD JUMPS AS CHINAS RESERVES DOUBLEChina is away smarter than North American Banks
Gold jumps as China's reserves apparently double
By Chris Oliver
Last update: 2:00 a.m. EDT April 24, 2009
HONGKONG (MarketWatch) -- China's has added to its gold reserves and nowholds 1,054 metric tons of the yellow metal, according to a Fridayreport by the Xinhua News Agency, which cited comment by Hu Xiaolian,head of the State Administration of Foreign Exchange. A Dow JonesNewswire report said the figure cited was nearly double China'sreported gold reserves as of the end of last month, but noted that itwasn't clear what measure of gold holdings Hu was referring to. Spotgold prices shot up 0.8% to $911.40 an ounce shortly after news broke.
China's been building its gold reserves - now over 1,000 tonnes
AChinese official has confirmed the belief that the country has beenquietly building up its gold reserves. It is now the world's fifthbiggest holder of gold with more than 1,000 tonnes held.
Author: Alfred Cang and Lucy Hornby
Posted:Friday,24 Apr 2009
BEIJING (Reuters) -
China revealed on Friday that it had quietly raised its goldreserves by nearly three-quarters since 2003, increasing its holdingsto 1,054 tonnes and confirming years of speculation it had been buying.
Hu Xiaolian, head of the State Administration of Foreign Exchange(SAFE), told Xinhua news agency in an interview that the country'sreserves had risen by 454 tonnes from 600 tonnes since 2003, when Chinalast adjusted its state gold reserves figure.
The world gold market has been buzzing with talk about China buyinggold for years as the country's foreign exchange reserves haverocketed, and speculation has picked up since the global economiccrisis threatened to weaken the value of those reserves.
Gold prices jumped on the news and were up 1 percent on the day at $910.80 an ounce at 0540 GMT.
China recently reported the change in its gold holdings to theInternational Monetary Fund and would include the latest change incentral bank reports and balance of payment statistics, Hu said.
China's reserves were now the fifth biggest in the world, with only six countries holding more than 1,000 tonnes, she said.
China had increased its stocks by buying on the domestic market and from domestic producers.
Gold market participants said Hu's revelation was good news for the market and signalled likely further buying.
"The comments indicate that China will buy more gold as reserve toimprove its foreign reserve portfolio. This is a trend," said YaoHaiqiao, president of Longgold
Asset Management.
Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tonnes.
"It's not a matter of a few hundred, or 1,000 tonnes. China shouldhold more because of its new international status, and because of thefinancial crisis," he said.
"The financial crisis means the U.S. dollar value is changing fast,and it may retreat from being the international reserve currency. Ifthat happens, whoever holds gold will be at an advantage."
The European Central Bank recommends its member banks hold 15percent of their reserves in gold, but among Asian nations thepercentage is far smaller, said Albert Cheng, World Gold Councilmanaging director for the far east.
(Additional reporting by Chris Buckley in Beijing, Polly Yam in HongKong, Nick Trevethan in Singapore and Chikako Mogi in Tokyo; Editing byNick Macfie)
(Reporting by Chris Buckley; Editing by Tom Miles and Ken