China gold reserves are rising

Beijing (Aug 16)  China's gold reserves rose by more than 19 tons in July, after the central bank last month gave the statistic for the first time in six years.

Bullion holdings stood at 1,677.30 tons at the end of July, Xinhua said citing the People's Bank of China (PBoC), a 1.16 percent increase on June's 1,658 tons, France 24 wrote.

The rise is worth nearly $700 million, according to Friday's price of $1,118.25 an ounce on the London Bullion Market.

The PBoC issued gold reserve figures last month for the first time since April 2009, revealing a rise of 57 percent over the past six years.

China is the world's largest producer of the yellow metal, but the increase marked a slowdown in gold accumulation after holdings jumped 75 percent from 2003 to 2009.

China ranks fifth globally in gold holdings. The price of gold reached record highs near $1,800 in 2012 at the height of the US' bond-buying stimulus program and the eurozone debt crisis, before falling significantly.

But the yellow metal is considered a safe bet in times of turmoil and uncertainty, and it rose last week after China devalued its yuan currency, raising concerns over the health of the world's second-largest economy.

Beijing said the move was the result of switching to a more market-oriented method of calculating the daily reference rate which sets the value of the yuan.

China keeps a tight grip on its currency on worries sudden fund outflows or inflows could cause more financial risk and challenge its control, but it has also pledged to move towards more flexibility and is pushing for the yuan to become one of the units that make up the International Monetary Fund's ‘special drawing rights’ reserve currency.

Source: IranDaily