China Owns More Gold than Data Shows—Wells Fargo
The comments below are an edited and abridged synopsis of an article by Anna Golubova
China is currently the sixth-largest gold-holding nation in the world, but the reality could be much different as data out of the country is skewed to the downside, said Wells Fargo.
Considering that China is the top gold consumer and gold producer in the world, as well as the world’s second-largest economy, it could own more gold than is shown by the People’s Bank of China statistics, wrote Wells Fargo head of real asset strategy John LaForge.
“Don’t let the official statistics fool you,” said LaForge. “China and Chinese citizens are quite keen to hold gold.”
The latest official data revealed that China added 106 tonnes of gold to its official reserves in 2019, increasing the total gold reserves to 1,948 tonnes.
China’s real gold holdings are still a mystery to the precious metals market, but China likely owns more than is being reported, said LaForge.
China and its citizens like to hold gold as an investment, and import data from Hong Kong to mainland China corroborates this trend, according to Wells Fargo.
“The chart shows gold flows over the past year, from Hong Kong to mainland China. At 400 tonnes, gold flows from Hong Kong into mainland China were nearly four times higher than official People’s Bank of China statistics. Precisely where this gold is going, once it makes it into mainland China, is anyone’s guess,” LaForge said.