Still Hope For China Buying IMF Gold

Citigroup has expressed that opinion in a recent report:

“The [People's Bank of China] is deeply dissatisfied with the performance of its U.S. Treasury holdings and has made clear its intention to diversify including into gold,” analyst Alan Heap wrote in the report. “In November and December the PBC sold $46 billion of Treasures; they must be buying something.”

A large part of the reason for that dissatisfaction is the drop in the U.S. dollar. That drop, of course, has reversed. So, the PBoC may be less dissatisfied now than in November unless their trust in the U.S. and the greenback has been eroded. It's likely that they've decided to take a pass on that gold.

Not necessarily on gold period, though: there's still the output of domestic producers...


This other opinion, by Christopher Swann, says central-bank interest has waned, and that bullishness for gold should be reconsidered given that central-bank buying was one of 2009's reasons for gold continuing to advance.