China adds more gold to reserves
By Duncan Richardson, News Editor
19 Oct 2015
China increased its official gold holdings by 14.9 tonnes or 480,000 ounces in September according to data released by the Peoples Bank of China. China’s total holdings now stand at 54.93 million ounces or 1,708.5 tonnes.
The Federal Reserve reports the U.S. holds over 8,000 tonnes of gold. Although this assumes the Fed has not sold any of its gold or secretly leased any out.
Gold only makes up 1.7% of China’s total reserves with the majority denominated in U.S. treasuries. Many now believe China is reducing its exposure to U.S. debt and diversifying into gold bullion and other hard commodities. Whilst Chinese demand is waning internal U.S. demand for treasuries is rising. Domestic mutual funds have picked up the slack from the Chinese which has stopped yields rising.
In the last 5 years central banks have been net buyers of gold following 2 decades when central banks had no interest in expanding its gold holdings. This was typified when Gordon Brown sold over 50% of the UKs gold when the gold price was trading below $300 per ounce.