China is still gobbling up much of the world’s gold.
China is the world’s largest gold producer, with more than twice the annual gold production of the US. It is also the largest gold refiner.
Much of China’s gold position is kept under wraps. It reports its gold reserves occasionally but will go for years without providing any updates.
China’s official gold reserves have grown from 395 tons in 2000 to 1,948 tons in 2020.
But even official reports don’t tell the whole story. We wrote recently (See GOLD: Behind the Curtain) that China’s actual gold holdings may be secreted away in separate accounts, including army and communist party accounts. So, it may be sitting on more than ten times the officially acknowledged gold reserves.
Now Reuters reports that China’s gold imports through Hong Kong jumped nearly 42 percent in June. For the month it imported 30.88 tons. That compares with May imports through Hong Kong of 21.78 tons.
It means that China moved aggressively to take advantage of the correction in gold from over $1,900 in late-May, seen in the chart below.
We believe that is a wise move. We recommended buying the dips – particularly with the return of US inflation – earlier this year,
Reuters notes that “the Hong Kong data do not provide a complete picture of Chinese purchasing as gold is also imported via Shanghai and Beijing.”
Meanwhile, other central banks are climbing aboard the d-dollarization express, diversifying their reserves into gold. In June, Brazil, grew its gold reserves by 52 percent, purchasing an additional 41.8 tons.
We recommend you add to your personal gold reserve as well.