China To Become Second Largest Holder Of Gold

Posted at 12:04 AM (CST) by & filed under Trader Dan Norcini.

Dear Friends,

I call your attention to the following story from the Dow Jones wire service…

The amount of gold being discussed would make China the second largest holder of gold among the nations of the world, surpassed only by the US with its reported 8,133.5 tons. The more we see stories of this nature coming out of the various Chinese newspapers, the more credible this story becomes. I think it is a done deal and that the Chinese are going to be large buyers from this point forward. That should help to provide very strong buying support beneath the gold market.

I like to fantasize just a bit that they will come to the Comex and clean it all out in one night!

China PBOC Mulls Raising Gold Reserve By 4,000 Tons – Report
Tue Nov 18 20:51:38 2008 EST

BEIJING (Dow Jones)–China’s central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country’s huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.

The Guangzhou-based newspaper didn’t elaborate on the plan.

China’s forex reserves, at US$1.9056 trillion at the end of September, is the world’s largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.