gold price commentary, page-8

I followed up that China gold reserves issue. The article below indicates that China increased its gold bullion to the currently known level in mid 2009, 1054 t, but the article also tells us that China doesn't say much about when it is buying gold, so it may have been doing so since, or it may not:

http://www.marketwatch.com/story/china-gold-reserves-apparently-doubled
April 2009

HONG KONG (MarketWatch) -- China has boosted its gold reserves to 1,054 metric tons, according to a Friday report by Xinhua News Agency, which cited Hu Xiaolian, head of the State Administration of Foreign Exchange.

The increase makes China the world's fifth-largest holder of gold, just ahead of Switzerland, and among the six nations plus the International Monetary Fund that have reserves of more than 1,000 metric tons.

Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the IMF per the organization's rules.

The comments are China's first public acknowledgement in more than five years that its gold reserves had increased.

The new figure is 76% higher than the 600 metric tons reported at the end of March, a level that had been unchanged since December 2002.

Although Hu did not elaborate on where China had sourced the additional bullion, her comments were interpreted as meaning they came from domestic sources and may included refining of scrap metal.

Wire reports from the region suggested some of the bullion could have come from refining existing holdings that were not of sufficient quality to be counted among official reserves.

Analysts said China's bullion buying reflects efforts to diversify its nearly $2 trillion stockpile of foreign-exchange reserves.

"Chinese officials have been increasingly vocal about their concern on the U.S. dollar and the U.S. bailout policies of late, and have actively been seeking to diversify into other assets, especially commodities," said Martin Hennecke, an associate director with Tyche Group in Hong Kong.