China (Officially) Buys Gold For 7th Straight Month As Treasury Holdings Tumble
by Tyler Durden
ZeroHedge.com
Mon, 07/08/2019
China continued its renewed (public) gold-buying spree in May adding another 10 tons of the precious metal to its reserve – the seventh month of buying in a row.
“It’s a diversification away from the U.S. dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,” said Bart Melek, global head of commodity strategy at TD Securities.
“We have to remember that gold is nobody’s liability.”
While this figure is hotly contested as being an underestimate of Chinese State’s actual gold holdings, its the only figure available, and whatever the real number, its notable that the Chinese government has revived the trend of announcing physical gold purchases each and every month.
“Given the U.S.-China tensions, it is little surprise that China is attempting to diversify away its holdings of the dollar and Treasuries,” Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore, said in an email, adding that it’s likely to continue adding in the coming months as its reserve holdings still lag countries such as the U.S. and Germany.
“Aside from its attempt to diversify its holdings of dollars, owning more gold reserves is also an important strategy in China’s rise as a superpower,” Lee said.
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