China is the largest importer and producer of gold in the entire world. Yet, there arises an important question, “Is there demand for gold till date?” The answer verifies how the price of gold is going to fare in the entire world.
What did the analysts said about the gold market?
According to the analysts, it is secretly purchasing by the Central Bank of China and the People’s Bank of China (PBOC) that is far behind in the record demand of China although it has maintained gold reserves since April 2009. This has accounted for only 1% of the official international reserve, however it has made China to be the 6th largest holder of gold reserves in the entire world after United States, Germany, IMF, Italy and France.
The analysts, who are looking for gold, have pointed to the history of China for their financial transactions. When People’s Bank of China increased the gold reserves for the last time in the beginning of 2009 during the financial turmoil, it actually did it within a night in a great way. PBOC announced unexpectedly that the gold reserves had almost doubled to 1,054 tons which had increased from 600 tons. It has been said by a deputy governor of the bank that there has been increase because of household recycling and purchases on the gold exchanges. Apart from the gold vault of the Central Bank, there are two less popular places in China where you may hide gold and amongst them, one place is underground.
What did Zhu Zhigang say about the unfamiliar gold accumulation?
Zhu Zhigang, who is the Vice Chairman of Gold Association of Guangdong has said that there has been accumulation of unfamiliar quantities of gold at the twelve commercial banks. All of these banks have obtained their licenses from the year 2012 for importing gold to China. As such, China buying large amounts of gold from these banks. This consists of two international banks namely HSBC and the Australia and New Zealand Banking Group Limited (ANZ). Both of these banks have their license since the month of January in 2012. The gold reserves that these two banks have are not disclosed amongst the public. Thus, before the year 2012, there had been four big banks that were owned by the state and they were allowed to import as well as store gold.
You can get household gold on loan to the different jewelry factories. This practice has been discovered by the mining companies of China and they are allowed to sell at low rates on the market as it had been in the year 2003 when gold’s price had fallen by 28%.
You need to know that China is not going to export gold to the other countries. As such, there will be no incentive for the mining companies of China who want to export gold in a foreign country. However, you need to know that Shanghai and Hong Kong are only allowed for importing gold to China and China buying up large amounts of gold from these two countries. For this, the share of Hong Kong had been 1,158 tons for the year 2013 and it is considered to be the largest amongst the two of them.