Recent economic data coming from China shows the country increasing its gold reserves and is likely to continue investing in gold. According to information gathered from a recent report on China’s foreign exchange reserves, the country purchased 16 tons of gold during the month of August. This comes after China purchased an estimated 19 tons of gold in July. Since the end of July, the value of the county’s gold has gone from $59.2 billion to $61.8 billion.
This marks a 60% increase since 2009, the last time the country released information about its gold reserves. The information had not been available for the past six years, so it is impossible to know exactly when the reserves were increased. It was commonly believed that China’s central bank was investing in gold reserves and this newly released data confirms that the reserves have significantly increased.
The data that has been released in the past two months was part of the monthly update issued by the People’s Bank of China (PBOC). The bank reported on reserves just as they agreed to with the International Monetary Fund. This makes the country’s reserves remarkably more transparent after six years of leaving analysts guessing about China’s gold reserves.
With the Chinese yuan losing value, the market’s decreasing performance has caught the attention of investors worldwide. The PBOC’s decision to invest more in gold demonstrates that gold is increasing its value as an asset. Historically, China chose to invest in foreign currency such as U.S. Dollars, but now they are trading in their dollars for gold. Furthermore, increased gold reserves in China add more value to the gold market. As the PBOC continues to release data on its reserves China’s economy and the gold market will only increase in transparency.
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