China is continuing its major gold buying spree. Beijing scooped up 29 metric tons of gold in August, the tenth consecutive month that China has added to its gold reserves. The aggressive buying is a core element of the communist nation’s effort to diversify its financial reserves away from the U.S. dollar and to boost the importance of the Chinese yuan as a global currency.
After the string of purchases, the People’s Bank of China, the nation’s central bank, has boosted its gold reserves by 11-percent to 2,165 metric tons of gold. That makes China the seventh largest holder of gold in the world, after the United States, Germany, the International Monetary Fund, Italy, France and Russia. With reserves of more than 8,133 metric tons, the U.S. has nearly four times as much gold as the Chinese government. (A metric ton, also known as a tonne, is equivalent to 1,000 kilograms or 2,204.6 pounds, slightly less than a U.S. ton which is 2,240 pounds.)
China’s aggressive buying has helped to support the price of gold, in the face of rising interest rates which can weigh against the precious metal’s price.
While China has been a buyer of gold, the precious metal still composes a relatively small percentage of the nation’s monetary reserves—just about four percent—with the country’s foreign currency reserves standing at more than $3 trillion.
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