Chinese mystery puzzle
Where did all their mine production go? They didn’t export it. 2270 tonnes mined from 2009-2014. Where is it?? I’m on the list that doesn’t believe the number announced today.
ZeroHedge may be right with this take:
“[W]e await for the PBOC to start leaking incremental gold holding data every month (and especially in months when the market crashes) which will bring us ever closer to what China’s true gold holdings are.”
A strong number would have propelled gold and the yuan higher – not what you might want having just thrown everything but the kitchen sink at the crashing Shanghai market. China in the end is an export economy, much like Japan. It’s stock market value relies on exports. The strong yuan is futuristic, not intended for the present.
This announcement may have been timed for effect, but just as state-sponsored support for stocks elicits a response opposite the intended effect, so too will the weak gold reserves number. It could also have been part of a long-term plan (more likely) which takes us back to ZeroHedge’s suggestion. With time, it will become clearer what is on the agenda.
I doubt in the end that China’s gold buyers (or stock sellers) will be much affected by this announcement (if that’s what it is). The reaction in the gold market has been marginal – could just as well be a carryover in the latest chapter of the interest rate saga as it is the release of China’s gold number.