China transfers gold reserves to central bank

China

Save

E-mail

China transfers gold reserves to central bank

April 28, 2009

New York--The Chinese government has opted to transfer its gold reserves from a state agency to the People's Bank of China (PBOC), a move that highlights the growing importance of the metal as a monetary asset, according to a news release issued by the CPM Group.

According to the release, Hu Xiaolian, director of the Chinese State Administration of Foreign Exchange (SAFE), announced on April 24 that the agency purchased about 14.6 million ounces of gold between 2003 and now.

The SAFE had been holding the gold in an account but now has opted to transfer it to the PBOC's monetary reserves, upping the bank's monetary gold reserves from 19.3 million ounces to 33.89 million ounces.

This puts the PBOC ahead of the National Bank of Switzerland in rankings of central banks with gold monetary reserves, and means China's central bank now has the sixth largest gold holdings among monetary institutions, topped only by the United States, Germany, the International Monetary Fund, France and Italy.

Though gold prices responded only modestly to the news, rising to $913 an ounce in spot trading on Friday morning, the Chinese government's decision in the long term "is the most concrete sign yet that central banks are viewing gold as more important as a monetary asset," according to the CPM Group.

The CPM Group, a New York-based commodities research, investment banking, asset management and consulting firm, has written extensively for many years that central banks would reduce their net gold sales sharply around the last part of this decade, and that the banks would not return as net buyers of gold, as they were prior to 1965.

Yet, according to the release, the CPM Group modified that view in the Gold Yearbook 2009, stating that it was clear more central banks were becoming interested in adding gold to their monetary reserves, with other central banks currently considering following China's lead.

Between 2003-2008, investors bought an estimated 260 million ounces of gold, of which 14.6 million, or 5.6 percent, has been transferred to their monetary reserves, according to the release.

Save

E-mail

More China News

China to host diamond conference

Shanghai, China--CBI China, together with the Guangdong International Diamond Commerce Chamber, will host a conference in October focusing on Asia's growing importance to the diamond industry, according to a news release. Read More

More China News

More Like This

TOPICS

Design Portfolio

BROWSE

Video

Retailer Toolbar

America's Best Jewelers
Join the ONLY Social Network for Jewelry Retailers. Get access to expert content, peer best practices, and more.
Start networking today.

Newsletters
Topic-specific newsletters that deliver the latest news on jewelry, diamonds, wholesale operations and high-volume buying directly to your in-box.

ReaderConnect
Supplier information presented with every article, bringing you related, actionable content on every topic.

Yellow Pages
A comprehensive listing of associations, organizations, suppliers and services for the jewelry industry.

Classifieds
A comprehensive listing of job postings, product offerings and other materials for sale for the jewelry industry.

CustomerConnect
The most sophisticated suite of marketing services available for jewelry retailers, from Internet tools to data marketing.