China Boosts Gold Price Predictions
Tuesday April 28, 2009
For the first time since 2003, China has released information stating it has increased its gold reserves. Over the past six years, China has boosted its gold holdings by 454 tonnes giving it a total of 1054 tonnes, which makes China the world's sixth largest gold bullion holder.
That amount of gold is valued at a total US$31 billion and the increase marks the third time this decade China has registered bullion growth with the International Monetary Fund. While China has the world's largest foreign exchange reserves, gold only accounts for 1.6 percent of the total US $1.95 trillion.
China's blossoming bullion holding is good news for gold investors, and the news drove up gold prices almost instantly as investors responded to the new information. In the long term, it has positive implications for Australia's gold supply operations, which are tipped to become the third biggest export earner for the next financial year.
China's gold reserves are still lower than other industrialised countries, and the biggest gold reserves are found in the US (8134 tonnes), followed by Germany and France. Despite the increase in China's gold holdings, as a percentage gold actually dropped in relation to total foreign reserves, which has fuelled speculation that China will continue to buy gold as time goes on.