One should not be deluded into believing that China has given up its plan to stockpile gold, observers say, commenting on an alleged hesitancy of the People’s Bank of China (PBOC) to buy the precious metal.
China is quietly filling its coffers with bullion, observers presume.
In late July Bloomberg raised the issue of a potential discrepancy between Beijing’s longstanding strategy of accumulating gold and the figures of the People’s Bank of China (PBOC) which shows that the country’s bullion reserves have not increased since 2016.
According to the media outlet, this looks especially strange given the ongoing trade war unleashed by Washington on China, tensions on the Korean Peninsula and plummeting gold prices, an obvious reason to buy the precious metal.
“The strategic imperative is probably still there to add some gold to reserves quietly bit by bit,” Philip Klapwijk, managing director of Precious Metals Insights Ltd., a Hong Kong-based consulting firm, told the magazine.
As of August 2018, China’s gold reserves amounted to 1,842.6 metric tons, according to World Gold Council. The figure has remained unchanged since Donald Trump’s election, as the PBOC’s June statistics indicated.
In contrast, Russia is boosting its yellow metal reserves at a steady pace: The country’s central bank seemingly surpassed the PBOC by accumulating 1,857 metric tons of gold by January 2018. According to World Gold Council, Russia currently owns 1944 tons of bullion. The two countries have been enthusiastically stockpiling gold for the last 15 years. Beijing’s apparent change of strategy in recent years looks rather intriguing.
Meanwhile, The Nikkei reported on July 30 that Chinese gold miners are “on the hunt” for new mines overseas.
“Already the world’s largest gold producer, China’s views overseas mines as part of the country’s long-term strategic goals of expanding its economic influence and building up its manufacturing might,” the financial newspaper noted, adding that China’s Shandong Gold Group had teamed up with Canada’s Barrick Gold in early July.
The media outlet noted that China has good reasons for giving a boost to gold-mining. One of them is President Xi Jinping’s “Made in China 2025” initiative that envisages China’s technological leap in the coming years. It is no secret that gold is an essential component for the production of electronics. Besides, the newspaper highlighted that Beijing “has tight controls on taking gold out of the country.”
Speaking to The Nikkei, Takahiro Morita, chief of Morita and Associates, noted that while the PBOC had not bought gold in recent years, China still adheres to its strategy of boosting gold reserves in order to back its currency, the yuan.
Yet another reason to believe that China is covertly increasing its precious metal holdings is the country’s record of keeping its gold operations a secret. Thus, in July 2015 China suddenly announced that it had increased its bullion stockpiles by almost 57 percent after remaining silent on the matter for six years.
Beijing’s imperative for stockpiling bullion is based on its desire to move away from the US dollar, and American Treasuries, Keith Neumeyer, chairman of the board of First Mining Gold, a Vancouver-based development firm, told Sputnik.
“I’m certain that a global reset will take place when the governments of the world need to rid themselves of debt, and that they will tie everything to the price of gold. That’s why countries like Russia and China are accumulating gold — they know what may happen a few years from now,” he emphasized.
Sourse: sputniknews.com
