China finally says how much gold it has, but nobody believes it

by Myra Saefong
17-Jul (MarketWatch) — China just released data on its gold holdings for the first time in about six years, but investors say the guessing game about the country’s actual inventory continues.

The People’s Bank of China on Friday published figures on its gold reserves for the first time since 2009. It’s official gold reserves stood at 53.3 million ounces, or 1,658 metric tons in June.

The last time it reported official figures was in April 2009. Back then, the figure stood at 1,054 metric tons, according to Ross Norman, chief executive officer at Sharps Pixley.

The latest total is about half what the market thought it was. The market was generally expecting a total of well over 3,000 metric tons, according to Brien Lundin, editor of Gold Newsletter.

“There is much evidence that [China’s] holdings are actually at those higher levels, which makes one wonder why they would feel compelled to understate the total now,” he said.

…Ken Ford, president of Warwick Valley Financial Advisors, said China has been pressing to be included in the International Monetary Fund’s Special Drawing Rights, or SDR, currency basket. “So they want to show that the have accumulated enough, but do not want to show their whole hand because it may spook the markets,” he said.

…O’Byrne said he wouldn’t be surprised if China starts to accumulate a minimum of 100 metric tons of gold a month going forward.

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