China finally says how much gold it has, but nobody believes it
China released data on its gold holdings for the first time in about six years, but investors say the guessing game about the country’s actual inventory continues.
The People’s Bank of China on Friday published figures on its gold reserves for the first time since 2009. Its official gold reserves stood at 53.3 million ounces, or 1,658 metric tons, in June.
The last time China reported official figures was in April 2009. Back then, the figure stood at 1,054 metric tons, according to Ross Norman, chief executive officer at Sharps Pixley.
“There is much evidence that [China’s] holdings are actually at those higher levels, which makes one wonder why they would feel compelled to understate the total now,” he said.
China’s disclosure comes on a day when futures prices for gold logged their lowest settlement in more than five years. August gold GCQ5, -1.57% finished Friday at $1,131.90 an ounce on Comex. Read: China wants to steal gold-market ‘reins’ from New York, London
Ken Ford, president of Warwick Valley Financial Advisors, said China has been pressing to be included in the International Monetary Fund’s Special Drawing Rights, or SDR, currency basket. “So they want to show that the have accumulated enough, but do not want to show their whole hand because it may spook the markets,” he said.
China has undertaken economic reforms aimed at persuading the IMF to include the yuan in the basket, which would accelerate its acceptance as a reserve currency. Read: China’s yuan has ‘Long March’ to reserve-currency status
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