... back to China and its official holdings. The likelihood has to be that the country is indeed increasing its gold holdings, but they are not yet finding their way into official reserves, but are being held in some other non-publicised government account. This is the kind of subterfuge  China can undertake while continuing to deny that its official reserves are being increased.

They would see this as true, but all the while gold may well be being accumulated nonetheless.  Since its 2009 reserve upgrade, China has produced close on 1200 tonnes of gold, and given it does not export its gold production -- and all that is produced is sold to the state in some form or another -- then it is not unreasonable to suggest that it has actually doubled its gold reserves over this period to nearer 2,000 tonnes.

If the state is also buying gold from other external sources, then this figure could be even higher -- some reckon far higher, given the high levels of imports seen over the past 2-3 years, years which have seen overall gold imports into the country rise dramatically. While much of this may have been taken up by burgeoning public demand, it is certainly not inconceivable that some - maybe a considerable amount - is also finding its way into state controlled coffers.


There are those who believe that China may be in the process of building its domestic gold holdings to the kind of level the U.S. officially holds -- 8,133.5 tonnes and that the country will achieve this by 2015. Why? The theory is that China, long term, is looking to replace the dollar as the world's principal reserve currency with the yuan.

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