China Buys (More) Gold

Thursday, December 23, 2010 , , , 2 Comments

Filed under: Surely someone saw this coming.


Gold’s record rally has been attributed to everything from worries about inflation, the dollar and the emergence of exchange-traded funds. One big factor many may have missed: huge buying from China.

Data cited Thursday by China’s state-run Xinhua news agency showed that China imported 209.7 metric tons of gold in the first 10 months of the year, a fivefold increase compared with the same period last year.

That surpassed purchases made by ETFs and surprised analysts, who until now had no clear insight into the size of China’s buying.

Where the hell did China get 209.7 tons of gold from? It certainly wasn't the IMF, who just completed their massive sale of 400+ tons (sounds like they ended up a few short by the end of it):

During October and November 2009, IMF sold a total of 212 tons in this manner to the Reserve Bank of India, the Bank of Mauritius, and the Central Bank of Sri Lanka. On September 7, 2010, the Fund sold 10 metric tons to the Bangladesh Bank.

IMF said on Nov. 29 it told 19.5 tonnes of gold in October, but it has not yet provided details of sales in November or December.

Not looking to upset the apple cart nor ruin the trillions in dollars they're sitting on, the Chinese have chosen to take the domestic production route, claiming they're turning over 300+ tons a year. Who needs the IMF with gold like that?

For China to turn to the IMF for the gold they're hawking would be an outright admission that they've lost their faith in the dollar and we know they are much more clever than that.

Last we heard, China had quietly increased its gold holdings 75% in a 6 year period and no one knew.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Graybeard said...

I don't know where to go to cross check this, but I've read that the Chinese government is buying gold mines in Africa and South America. Even better than buying gold outright and less likely to cause a panic. China's big problem is that they hold a bunch of US paper that they fear will soon be worth less than Charmin. If they buy gold too fast or too openly, they can make that happen sooner.

wcv said...

China doesn't give a shit about their dollar holdings.

It's all about the broke-ass deadbeat plastic duck junkie.