China Amassing Gold at a Quickening Pace

China has reportedly been rapidly amassing staggering amounts of gold.

From the anonymous writer at the Zero Hedge… (bold emphasis original)

We have just gotten the April update, and, lo and behold, the country which is now the biggest buyer of gold, having surpassed India, just set a new record: "Gold imports by mainland China from Hong Kong climbed 65 percent to a record in April, advancing for a third straight month as investors sought a hedge against financial-market turmoil and an economic slowdown. Shipments totaled 103,644.5 kilograms (103.6 metric tons) in the month from 62,913 kilograms in March, according to export data from the Census and Statistics Department of the Hong Kong government today. In the first four months, imports were 239,174 kilograms from 27,114 kilograms a year earlier, according to Bloomberg calculations. China doesn’t publish such figures." In other words: in the first four months of 2012 Chinese purchases have increased by an unprecedented 782% over 2011.

And this is only from Hong Kong! Said otherwise: "Is the PBOC, which officially has just 1,054 tons of the yellow metal, quietly and relentlessly stockpiling gold?" Oh yes.

Expect a formal announcement from the Chinese central bank in the months ahead, indicating the country's gold hoard has increased by at least 100%. What happens then to the price of gold is rather self-explanatory.

So far, it appears that China’s thrust of calling the stimulus buff, along with recent actions of further liberalizing her markets, aside from “encouraging private investments”, seem to chime with her desire to convert the yuan into a foreign currency reserve that would compete with the US dollar.

As I previously wrote,

Yet while the PBoC may likely engage in policies similar to her Western central bankers peers where inflationism has signified as an enshrined creed, it is unclear up to what degree the PBoC will be willing get exposed. That’s because China has made public her plans to make her currency, the yuan, compete with the US dollar as the world’s foreign currency reserve, which is why she has been taking steps to liberalize her capital markets and China has also taken a direct bilateral financing trade route with Japan, which seems to have been designed as insurance against burgeoning currency risks and from the risks of trade dislocations from potential bank runs. It is important to point out that the US has some exposure on major European nations.

Further speculations and rumors have it that China covertly plans to even issue a Gold backed currency as part of her quest to attain a foreign currency reserve status.

It could also be possible that China’s quickening pace of gold hoarding could be as insurance against a potential cataclysmic currency crisis that could be unleashed from political responses by major central banks to avert a global recession.

Again, events have been soooo fluid that anything can just happen.