Earlier this week, we wrote about China’s latest effort to internationalize its gold market, and we’ve previously covered its efforts to encourage citizens to hold personal savings in precious metals. It appears to be part of a somewhat discreet pattern of behavior China has adopted in the gold market, perhaps to become a much bigger player, that’s not gone entirely unnoticed.
According to Mineweb:
“Earlier this year [...] the World Gold Council had entered an agreement with China’s, and the world’s, largest bank the Industrial & Commercial Bank of China (ICBC) (state-owned of course) to co-operate to promote gold investments in China. Yesterday we learnt that China is further loosening its controls on the import and export of gold on the one hand, and on the other that it is also going to support Chinese company investment in overseas gold mining projects.
“Does anyone notice a pattern emerging here?
“…A senior Chinese official has stated publicly that the country will buy gold on the dips so as not to disrupt the market and undermine the US dollar – and there is perhaps more than anecdotal evidence that the Chinese government is buying gold, effectively surreptitiously, for its reserves, but not disclosing this until it reckons it is opportune so to do. Last time it announced an increase in gold reserves it had in fact been accumulating the yellow metal for 6 years before it actually made the fact public.”
Because China is the world’s largest gold producer, it has the means to buy gold from its domestic producers “surreptitiously” as stated above. Further, as suggested above, if China were to suddenly announce a huge increase in its gold reserves it wouldn’t be the first nation to do so. Saudi Arabia already set the precedent in late June when its restated gold reserves and revealed it holds about twice as much gold as previously thought. We’ll be sure to keep an eye on further gold-related actions by China.
You can read more specifics from Mineweb in its coverage of the dragon’s golden teeth.
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