Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

China May Announce Its Gold Reserves Are 2nd Largest in World

  by    1   3

According to Bloomberg Intelligence, China’s gold bullion reserves may have tripled since its last official report in 2009. Bloomberg estimates that the People’s Bank of China could now own as much as 3,510 metric tons of the metal. If true, China now has the second largest store of gold in the world, following the United States with 8,133 tons.

15 04 22 china gold copy

While there has been a lot of speculation in the past few years that the Chinese government has been stockpiling more gold, this is the first mainstream American news source that we have seen seriously look into the possibility. Bloomberg reached its estimate by analyzing China Gold Association data, as well as domestic production and trade figures.

Why this sudden attention to China’s gold hoard? The International Monetary Fund will be re-examining the composition of its Special Drawing Right (SDR) currency basket this year. Every five years the IMF reviews the SDR to ensure its holdings reflect the relative importance of world currencies. It is currently composed of dollars, euros, yens, and British pounds.

China wants its yuan added to this basket of currencies, and it has a strong case to make. In January, we learned that the Chinese yuan became one of the top five payment currencies in the world in late 2014. On top of that, China also surpassed the US as the world’s largest economy when measured in economic output.

However, to get the yuan added to the SDR, China needs to prove its currency is not only central to the global economy, but also stable. That’s where gold comes in. Gold is one of the most widely-accepted assets for diversifying and stabilizing a portfolio, whether it be the foreign-exchange reserves of a large country or the holdings of a savvy investor.As Bart Melek of TD Securities told Bloomberg:

If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies… [Gold is] certainly viewed as a viable store of value for an up-and-coming global power.”

A sudden revelation that China’s gold holdings had tripled in the last six years could add significant support to the price of gold. It may even catalyze a dramatic upward move.

To better understand the role of SDRs in the global economy, watch this short video from the IMF. It’s easy to see how the yuan could become an even more essential currency in international trade practically overnight.

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

The Tax Man Cometh! And Not Just for Billionaires

The tax man cometh! And thanks to the Democrats in Congress, there will be more tax enforcers shining their lights into the nooks and crannies of Americans’ finances.

READ MORE →

Fed Balance Sheet Reduction Not Delivering as Promised

The Federal Reserve is all-in on the inflation fight. Or is it? While everybody focuses on interest rate cuts, the promised Fed balance sheet reduction isn’t going quite as promised.

READ MORE →

Record Consumer Debt Levels Continue to Climb

Consumers continue to add to their record level of debt as higher prices squeeze wallets. Americans added another $40.1 billion to the debt load in June, according to the latest data from the Federal Reserve. That represents a 10.5% year-on-year increase.

READ MORE →

Central Banks Added Gold at Faster Pace in June

Central bank gold buying notched up again in June. Central banks globally added 59 tons of gold to their reserves last month and there were no reported sales, according to the latest data compiled by the World Gold Council.

READ MORE →

Labor Market Showing Cracks as Job Openings Decline More Than Expected

Despite back-to-back contractions in GDP, President Joe Biden, Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and all of their supporters in the corporate media insist the US economy isn’t in a recession. But the only data they ever point to in order to back up their assertion is the “strong” labor market. The problem […]

READ MORE →

One thought on “China May Announce Its Gold Reserves Are 2nd Largest in World

  1. […] China wants its yuan added to this basket of currencies, and it has a strong case to make. In January, we learned that the Chinese yuan became one of the top five payment currencies in the world in late 2014. On top of that, China also surpassed the US as the world’s largest economy when measured in economic output. China May Announce Its Gold Reserves Are 2nd Largest in World – Peter Schiff’s Gold News […]

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Call Now