China’s huge appetite for gold continued to increase last year, exceeding the 1,000-tonne mark, which represents a 41.36% surge over 2012, data released by the China Gold Association (CGA) reveals.
We would not be surprised to hear the People’s Bank of China announce a new, significantly higher figure, if it chooses to do so.—Na Liu of CNC Asset Management, as quoted by FT.com
The country said the 1,176-tonne figure reflects a domestic demand for jewellery and bars mostly unaffected by 2013’s gloomy global market conditions. Analysts, however, have another theory.
While it’s true that Chinese buyers saw weak gold prices as a buying opportunity, some insist the nation’s central bank took advantage of the situation and bulked up its holdings of the precious metal.
The latest official figures, reports FT.com (subscription required), show that China imported and produced considerably more gold in 2013 than its citizens bought. The gap, in fact, is not minor—over 400 tonnes.
Let’s do the math:
- Total gold imported by China in 2013 = 1,157 tonnes
- Total gold produced by China = 428 tonnes.
- 1,157 + 428= 1,585
- Total gold consumed by China in 2013 = 1,176 tonnes (CGA)
1,585 – 1,176 = 409 tonnes unaccounted for.
“We would not be surprised to hear the People’s Bank of China announce a new, significantly higher figure, if it chooses to do so,” Na Liu of CNC Asset Management told FT.com.
Instead, the nation’s central bank announced February 10 that its gold reserves continue to stay at 1,054 tonnes, the same figure published since April 2009, Xinhua reported.
“It remains a mystery what happened to the other gold available in China,” brokers at Macquarie were quoted by the Telegraph as saying.
South China Morning Post columnist Tom Holland said analysts are creating and fuelling “conspiracy theories” which are all “nonsense.”
“Yes, it is true that China has been buying an awful lot of gold recently…. But one reason these theories can gain traction is Beijing’s own reticence about its gold holdings,” he writes.
Reprinted by permission of MINING.com