Is China Hoarding Gold to Challenge the U.S. Dollar?
China’s official gold holdings stand at 1,054.1 tonnes, though analysts think that it actually holds around 2,000 – 3,000 tonnes. During 2004 – 2009, China boosted its gold reserves by 76%.
Here are other Countries Hoarding Enormous Piles Of Gold
- Switzerland
- Japan
- Netherlands
- India
Yet China is only the sixth largest holder of gold reserves globally. Analysts believe that China is building up its gold reserves to internationalize its currency and dislodge the U.S. dollar as the global reserve currency.
Alan Greenspan, former Fed Chairman also notes that converting even a miniscule percent of its $3.7 trillion forex reserves into gold will strengthen the Yuan considerably.
More recently, Russia expanded its gold holdings to 1,094.7 tonnes, to move up to number 5 and is planning to buy more gold to diversify from the dollar and euro in wake of the economic sanctions. Germany, Italy and France are top gold owning countries, led by the U.S., which holds 8,133.5 tonnes of gold reserves.
Gold coin sales continue to Rise – Domestic Rise of Sales
Gold demand in U.S. is growing with September witnessing 58,000 ounces of gold coins sales, the highest since January.
Gold is viewed as a good portfolio diversifier and combined with stocks and bonds reduces overall risk and volatility.
Given the current market situation due to zero interest rate regime, weak economy and induction of a bout of junk bonds, people are adding gold as a hedge in their portfolios. The current low prices of gold is only an added incentive.