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 monthly Gold Videocast.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Speculation Swirls, Trial Balloons Fly: Who’s Next Up for Fed Chair?

Speculation continues to swirl around the question of who President Trump will appoint as Federal Reserve Chair when Janet Yellen’s term comes to an end in February. Trump will reportedly meet with Yellen this week to discuss the possibility of her staying on as the head of the central bank. During the presidential campaign, Trump […]

READ MORE →

Palladium Price Hits 16-Year High

Palladium probably isn’t something you think about when you consider investing in precious metals. Maybe you should. Palladium broke through the $1,000 mark on Monday. The price of the metal has spiked nearly 50% in 2017 and is at its highest level in 16 years. Related

READ MORE →

Is Silver Set to Soar?

Could silver be set to soar? Analysts Barron’s spoke with recently think so. An article published on the business journal’s website last week predicted the white metal will emerge as a winner for the second straight year. With a per-ounce price of $17.41 for silver futures as of Friday, analysts say the white metal is […]

READ MORE →

Australian Gold Mine Production on Track to Fall By Half Over Next 25 Years

Australian gold output will peak in just four years and then begin a steep decline, according to a report issued by a Melbourne-based industry adviser. According to MinEx Consulting analysis reported by Bloomberg Business, Australian mine output will max out in 2021 and then fall by half into the mid-2050s, as aging mines close down. […]

READ MORE →

Bitcoin or Gold? Do I have to Pick Just One?

People seem to enjoy pitting gold and Bitcoin against each other. But do I really have to pick just one? While cryptocurrency and precious metals have many similarities, in many ways they are polar opposites. And you can have both. Related

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 *

Free Newsletter & Notification of Special Deals
RSS Feed
LINKEDIN
YouTube Channel
YouTube Channel
Google+
Google+
https://schiffgold.com/key-gold-news/china-may-announce-its-gold-reserves-are-2nd-largest-in-world
Call Now