Central banks’ appetite for gold bullion doubled in the second quarter of 2012. The central banks bought 157.5 metric tons of gold bullion in the second quarter. The reason for this recent spree of gold bullion buying was to diversify their foreign exchange reserves. (Source: Market Watch, August 17, 2012.) Central banks don’t seem to be relying only on the U.S dollar as much—and I wonder why.
Gold bullion accounts for 1.6% of China’s $3.2-trillion foreign exchange reserve, compared to the international average of about 10% of foreign exchange reserves in gold bullion. (Source: Financial Times, August 17, 2012.)
Gold bullion accounts for 1.6% of China’s $3.2-trillion foreign exchange reserve, compared to the international average of about 10% of foreign exchange reserves in gold bullion. (Source: Financial Times, August 17, 2012.)
There is speculation that China’s central bank is planning to buy at least 5,000 to 6,000 metric tons of gold bullion over the next two years and it will start purchasing that gold bullion this year. Keep in mind that the average production of gold bullion mines is about 2,602 metric tons per year, according to World Gold Council.
A simple calculation would show that, if the central bank of China is planning to buy 5,000 to 6,000 tons of gold bullion and the total gold bullion production of the mines is 2,602 tons per year, this suggests that the Chinese central bank will be buying more than a two years’ supply of gold bullion produced.
China’s appetite for gold bullion is as strong as ever. In the first two quarters of 2012, China’s inflow of gold bullion from Hong Kong increased six times! In addition, the imports of gold bullion from Hong Kong were higher by 65% in April, compared to March. (Source: Mineweb, August 9, 2012.)
China’s appetite for gold bullion is as strong as ever. In the first two quarters of 2012, China’s inflow of gold bullion from Hong Kong increased six times! In addition, the imports of gold bullion from Hong Kong were higher by 65% in April, compared to March. (Source: Mineweb, August 9, 2012.)
More evidence of China adding to its gold bullion reserve: China National Gold; a state-owned miner, is looking at buying Barrick Gold Corporation’s (NYSE/ABX) interest in a major African gold mine. This would be the biggest gold bullion deal that China National Gold has ever done. (Source: Reuters, August 17, 2012.)
The Chinese central bank will never say when it’s going to buy gold bullion and how much, but from the looks of it, it is certainly spreading its wings.
More information can be found online at http://www.goldbullionadvisors.com
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