China starting a big gold purchase program soon

China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report

Wed, Nov 19 2008, 01:51 GMT
http://www.djnewswires.com/eu

The Chinese central bank will do what everyone should do - it will put some assets into hard commodities over the next months as inflation will be revived going forward. The current retreat of inflation is temporary. The unprecedented liquidity amounts pumped into banks will find its way into the system (real economy) together with humongous economic aid programs due by President Obama and other countries.

China PBOC Mulls Raising Gold Reserve By 4,000 Tons - Report:

BEIJING (Dow Jones)--China's central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country's huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.

The Guangzhou-based newspaper didn't elaborate on the plan.

China's forex reserves, at US$1.9056 trillion at the end of September, is the world's largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.

  Newspaper Web site: http://gzdaily.dayoo.com

  -By China Bureau, Dow Jones Newswires; (8610) 6588 5848; djnews.beijing@dowjones.com