World’s Top Gold Producer Holding Onto All of Its Gold

While Western central banks have frittered away their gold, China is quietly building up its reserves.

China is the world’s largest gold producer.

 

goldproduction2011 China Is Quietly Becoming Gold Superpower

 

And yet – according to various sources – gold bullion brokers have not seen any gold coming from China.

In other words, China is producing more gold than any other country, but isn’t exporting any of it.

As such, China is quietly becoming a gold superpower.

Note: China has a habit of being quiet for several years at a time, and then announcing big increases in gold holdings. So quoting old numbers will only mean that one is caught flat-footed as to China’s current holdings.

Category: Gold & Precious Metals

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7 Responses to “China Is Quietly Becoming Gold Superpower”

  1. wcvarones says:

    You spelled Uzbekistan wrong.

  2. constantnormal says:

    … perhaps they mean to float the renminbi as a gold-backed alternative to the increasingly untrustworthy (at least so long as our Congress is determined to run us into the ground fiscally) USD, offering it up as a new global reserve currency, either by itself, of as part of a basket of currencies.

  3. constantnormal says:

    Nothing quite like starting a crazy rumor to get the week rolling …

  4. andao says:

    @constantnormal
    How would having a gold backed currency help China? They rely on currency manipulation to boost exports and keep unemployment very high. I think a gold backed currency would add an unnecessary restriction on the government’s economic policy.

    The yuan is still really hard to move around. Foreigners can’t invest in China, and vice versa, households can only move 50k RMB per year out of the country, etc. I think China would need much more developed (and open) capital markets before a gold standard would make sense.

    It’s probably just a hedge for rising prices on natural resources. If they buy gold now while the yuan is relatively high, they can devalue it later if unemployment creeps up, to boost exports. Then they still have piles of gold to buy oil and iron with. It could also simply be factories using gold as loan collateral. Factories are notorious for using copper, iron, soybeans, etc for loan collateral (hence the enormous stocks of unused copper in Shanghai bonded warehouses).

  5. I think both comments are right but are just looking at different durations. In the near term, China relies on a cheap currency and an export driven economy. Over the longer term, they want to internalize demand and be less reliant on exports. As that shift occurs, they will be less reliant on a weak currency. Also, if you look at Chinese FX reserves, the percentage of gold is very low versus developed nations. If they do want to move toward making the Renminbi the new world reserve currency, they will need to increase the amount of gold backing it.

  6. VennData says:

    Hey Goldbugs, here’s a place you can move to when tax rates are raised another…. 3%!

    1) Discipline. A complete rejection of Socialism. Militarism.

    2) Homosexuality, flag burning and abortion are ALL illegal… well, two out of three. And the gun thing’s a no-go too.

    Hmm….

    Well, keep looking, you’ll find at least on example of Mitch-McConnell paradise. Remember, according to all those egg-headed mathematicians, all you need is one example to prove that it’s possible. All you need is one Right-Wing paradise. So GO on! You can find it. Ask A GOP PAC, they will be able to spoon feed you an example of Right-Wing Shangi La. There’s got to be one out there…

  7. 10x25mm says:

    The commodity guys I work with say that the Chinese are importing gold at a rate of 40 – 50 metric tons per month through Hong Kong. This is over and above their retention of domestic output.