2013-03-16sprottgroup.com

If Yi's comments are to be believed, he is implying that the Chinese government has not added a single gold bar to its reserves since 2009 - which was the year the Chinese government officially announced its gold reserve increase to 1,054 tonnes. Given the production and import numbers stated above, we find that extremely hard to believe.

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We also believe China's current gold reserves are significantly more than the stated 1,054 tonnes. Given that the entirety of China's domestic gold production remains held in-country, the escalating level of gold imports through Hong Kong (which have totaled a cumulative 1,051 tonnes since 2010), and the sheer size of China's US dollar reserves, it seems highly probable that a large portion of that gold is making its way to the PBOC. The fact that Chinese officials seek to deny this should not be surprising, as any suggestion to the contrary has the strong potential of moving the gold price higher


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