China Reveals Nearly 60% Gold Reserves’ Growth in Six Years
China positioning itself for dollar collapse
China’s gold holdings grew by 604 tons to 1,658 tons since 2009, according to the data from People’s Bank of China revealed on Friday.
The country thus overtook Russia to become the fifth largest holder of gold in the world.
The information has been disclosed after a six-year delay. China’s central bank has reported changes to its gold reserve levels only four times over the last 15 years, according to analysts at UBS.
“The market has been speculating on the size of China’s gold reserves for years and the central bank has always been reticent until now,” Fu Peng, a portfolio manager at Lianzhan Global Macro Fund Management Co., told Bloomberg.
China now follows the US, Germany, the International Monetary Fund, Italy and France, who are the world’s largest gold holders, according to the World Gold Council. The US has the biggest gold reserves at 8,133 tons.
Some analysts say China’s unexpected data announcement is a move to support the recognition of its currency. China is seeking IMF acknowledgement of the yuan as an official reserve currency, on par with the US dollar, the Japanese yen, the euro and the British pound.
“China is still pushing for a greater role for its currency globally by having full transparency,” Fu said.
An IMF decision about the inclusion of the renminbi in its Special Drawing Rights (SDR) is expected later this year.
The country’s release of gold reserves could also be aimed at calming investors, analysts said. Since the middle of June, the Chinese market value has shrunk by over 30 percent, and the government has taken a number of measures to restore investor confidence and stop the sell-off.