SURREPTITIOUS PURCHASES. China’s hidden gold purchase policy. Evidence suggests that China is continuing to buy gold for its reserves, but is doing so in a manner designed not to over-disrupt the global gold market.
LONDON -
There seems to be little doubt that China continues to buy gold for its reserves, but surreptitiously, as it has no desire to move the markets unduly, and it knows full well that any announcement of a big gold purchase will likely do just that.
It is not exactly a secret that Chinese government economists and bankers are disturbed about the U.S. Quantitative Easing moves. They feel that this has ultimately to lead to significant inflation and a corresponding big decline in the value of the dollar within the next few years and with some $2 trillion in reserves this is not something they are keen to precipitate by announcements of a major gold purchase programme – or even by showing the world that its gold reserves are increasing.
In an interesting article in the U.K’s Daily Telegraph, International Business Editor Ambrose Evans-Pritchard comments on views expressed by Cheng Siwei who he describes as being “until recently Vice-Chairman of the Communist Party’s Standing Committee, and now a sort of economic ambassador for China around the world” and thus in a good position to understand the country’s policies vis-a-vis gold purchases and the dollar.
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