China finally says how much gold it has, but nobody believes it

Section:

By Myra P. Saefong
MarketWatch.com
Friday, July 17, 015

China released data on its gold holdings for the first time in about six years, but investors say the guessing game about the country's actual inventory continues.

The People's Bank of China on Friday published figures on its gold reserves for the first time since 2009. Its official gold reserves stood at 53.3 million ounces, or 1,658 metric tons, in June.

The last time China reported official figures was in April 2009. Back then the figure stood at 1,054 metric tons, according to Ross Norman, chief executive officer at Sharps Pixley.

The latest total is about half what the market thought it was. The market was generally expecting a total of well over 3,000 metric tons, according to Brien Lundin, editor of Gold Newsletter.

"There is much evidence that [China’s] holdings are actually at those higher levels, which makes one wonder why they would feel compelled to understate the total now," he said. ...

China has undertaken economic reforms aimed at persuading the IMF to include the yuan in the basket, which would accelerate its acceptance as a reserve currency.

Or China could be "lowballing" their reserves to maintain confidence in its substantial U.S. dollar holdings, according to Mark O'Byrne, research director at GoldCore in Dublin. ...

... For the remainder of the report:

http://www.marketwatch.com/story/china-finally-says-how-much-gold-it-has...



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