China Plans to Increase Its Gold Reserves

Chinese continue to diversify away from U.S. assets

China has announced its intention to increase its gold reserves. China has relatively low gold reserves, especially when compared with the large economy the country has, and comparisons with the kind of gold reserves held by the U.S. and by Europe. However, China hopes to change that a little bit by adding more gold reserves. As a result, China is buying up some gold, sending the price of spot gold up by about 1%.

Increasing the country’s gold reserves is part of the overall plan by the Chinese to diversify out of U.S. assets. China holds a large number of Treasury bonds, but has lately made comments that indicate that perhaps a little more diversification is needed in the Chinese investment portfolio.

It remains to be seen how much gold the Chinese buy. Additionally, it is worth noting that China is also making oil and other energy investments, as well as looking into adding European assets to its investment portfolio.

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