The Hoarding Continues: China Purchases A Record 100 Tons Of Gold In April From Hong Kong
Tyler Durden submitted to Zero Hedge -
A month ago we were delighted to counterpoint Charlie Munger's prior remarks about the level of "civilization" of a given consumer based on their sentiment vis-a-vis gold, by demonstrating that Chinese purchases of gold from Hong Kong rose to a record.
And this is only from Hong Kong! Said otherwise: "Is the PBOC, which officially has just 1,054 tons of the yellow metal, quietly and relentlessly stockpiling gold?" Oh yes.
Expect a formal announcement from the Chinese central bank in the months ahead, indicating the country's gold hoard has increased by at least 100%. What happens then to the price of gold is rather self-explanatory.
Increased imports by the second-largest consumer after India may help extend a rebound in the precious metal that’s been driven by speculation the U.S. Federal Reserve may add to stimulus this month to safeguard the recovery. Spot gold rallied 4.1 percent on June 1 after U.S. jobs data missed expectations.
China’s central bank may also be boosting holdings, according to Wang Xinyou, a senior analyst at Agricultural Bank of China Ltd.
“The fundamentals are intact for a bull market in gold,”
Liang Ruian, head of commodities at Pinpoint Investment Advisory Co. “With so much economic uncertainty out there, the money-printing practice won’t stop. Central-bank buying is another bullish factor that shouldn’t be discounted.”
Immediate-delivery gold, which traded at $1,617.80 an ounce at 8:50 p.m. in Beijing, is 3.6 percent higher this year as investors and central banks bought the metal as a store of value.
Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose 1.5 percent in 2012, and central banks from Turkey to Kazakhstan added gold to their reserves.
And the kicker:
"We can’t rule out the possibility that the central bank is buying gold,” said Wang at Agricultural Bank of China, referring to the People’s Bank of China. The PBOC last made known its gold reserves more than two years ago, announcing that it held 33.89 million ounces, or 1,054 tons, as of June 30, 2009.
Rule out? You can bet on it. And when the press release is finally issued hold on to your gold hats folks...
June 4, 2012 (Source: Zero Hedge)