Chinese gold reserves may rise by 14 tons during October

Beijing (Nov 8)  China likely added about 14 tons of gold to its reserves in October, according to Reuters calculations from central bank data on Saturday. The value of China's gold reserves stood at $63.261 billion at the end of October, compared with $61.189 billion at the end of September, the People's Bank of China (PBC) said on its website.

Based on the London Bullion Market Association afternoon gold price on the last trading session of October, China's reserves likely totaled 55.378 million troy ounces or 1,722.5 tons at the end of last month, Reuters calculations show.

That would be an increase of about 14 tons from September.

China's central bank reveals the dollar value of its gold reserves early in the month, before revealing the volume numbers later on.

The October addition is the slowest pace of purchase since China started reporting its gold reserves on a monthly basis from July. Gold prices rose 2.5 percent in October.

The highest monthly purchase was nearly 19 tons in July.

China is the world's sixth largest official sector gold holder after the US, Germany, the IMF, Italy and France.

Gold still makes up less than 2 percent of China's total foreign exchange reserves, a factor the market believes will drive the PBC to continue buying the previous metal.

The US, the top holder of gold with more than 8,000 tons of bullion, has 73 percent of its total foreign reserves in gold, according to the World Gold Council (WGC).

China should increase its gold holdings to about 5 percent of its total reserves to help diversify currency risks, a WGC official said earlier this year.

China previously considered its gold holdings to be a State secret and did not report its holdings on a monthly basis to the IMF like most other countries.

It has begun doing so in a bid to increase transparency as it campaigns to include the yuan in the IMF's special drawing rights basket. Before the June update, China had last revealed its gold holdings in April 2009.

Source: GlobalTimes