South China Morning Post/Reuters/4-16-2021
“With China’s economy rebounding strongly since the second half of last year, its appetite for gold jewellery, bars and coins has also recovered, and since January domestic prices have been higher than global benchmark rates, making it profitable to import bullion. The People’s Bank of China (PBOC), the nation’s central bank, controls how much gold enters China through a system of quotas given to commercial banks. It usually allows enough metal in to satisfy local demand but sometimes restricts the flow.”
USAGOLD note: We might add that China’s commercial banks are where many gold market analysts believe the nation’s quietly accumulated and unreported national reserves reside. Credible estimates run as high as 10,000 tonnes resting quietly on the commercial banks’ balance sheets, as opposed to the roughly 1800 tonnes in national reserves reported by the World Gold Council. When it comes to gold, China is a price taker not a price maker as so many thought would be the case when it opened gold trading in Shanghai in 2019. For the time being, it is content to accumulate, and allow its citizenry to accumulate at current prices.
