The China Gold Bluff

You just know that these guys are and have been stockpiling gold.  They’re not going to tell you.  They don’t have to.  They also don’t want to be front-ran (or is it front-runned?).

I have no knowledge of their activities outside of what’s been said in the press so take my speculation with a grain of rice.  But I have my Street Smarts and they’re telling me that this country’s reserves are too big not to include more gold.

For what it’s worth, here’s what CNN Money had to say about China in a larger story about central bank gold purchases around the world:

China is considered a stealth buyer of gold, said Boris Schlossberg, director of currency research at Global Forex Trading. As the world’s largest producer of the metal, China often buys gold from its own mines and doesn’t report those sales publicly. But in April 2009, China did admit to having added 454 tonnes, or a 76% increase, to its reserves since 2003.

Analysts suspect the country is continuing to buy gold and could in fact, be the world’s largest buyer consistently. It simply doesn’t reveal it’s pro-gold stance proudly, however, because China is also the world’s largest holder of U.S. Treasurys.

Announcing an aggressive gold buying spree is not in China’s best interest because, for one, it might push gold prices higher. Secondly, it could devalue the U.S. dollar, which would subsequently lessen the worth of the country’s portfolio of U.S. government bonds, Schlossberg said.

They are so buying yellow metal, you guys.  I would guess.

Source:

Central Banks Join Gold Rush (CNNMoney)

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