China says gold stash rose almost 60% in six years

BEIJING: China’s official gold reserves rose by almost 60% over the past six years, according to the first official data on the subject since 2009.

The People’s Bank of China (PBoC) said bullion holdings rose to 1,658 tonnes as of the end of June, from 1,054 tonnes in April 2009, the last time a figure was released.

China is the world’s largest producer of the yellow metal, but the 57% pace of increase marked a slowdown in gold accumulation after holdings jumped 75% from 2003 to 2009.

Bloomberg News reported that China’s gold purchases since 2009 were second only to those of Russia, citing figures from the PBoC and International Monetary Fund (IMF). China ranks fifth globally in gold holdings, Bloomberg added.

The price of gold has fallen in recent months as investors expect the US Federal Reserve to hike interest rates by the end of the year, providing a better return than the precious metal.

On Monday an ounce of gold cost US$1,110, its lowest since March 2010 and well down from record highs near US$1,800 in 2012 at the height of the United States’ bond-buying stimulus programme and the eurozone debt crisis. Gold is considered a safe bet in times of turmoil and uncertainty.

China had foreign currency reserves of US$3.69 trillion as of the end of June, the world’s largest trove. The PBoC announces those figures on a quarterly basis.

The gold reserve figure - announced late Friday - comes as China works to internationalise its tightly controlled yuan currency. Beijing is also seeking to have the yuan included in the basket that makes up the IMF’s “special drawing rights” reserve currency.

The central bank said it would adjust its gold holdings according to its reserves and investment needs.

Zhang Qi, an analyst at Haitong Securities, told AFP that China’s gold to foreign currency reserve ratio remained much lower than other countries, adding: “The internationalisation of the renminbi is irreversible.” - AFP