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Chinese govt mulls higher gold reserves

By Hao Yan (chinadaily.com.cn)
Updated: 2010-11-17 15:49

The Chinese government is considering expanding its gold reserves, but it will move gradually, the 21st Century Business Herald reported Tuesday.

China cannot boost its gold reserves in a short time owing to certain restrictions, and the country will not carry out the plan soon, the newspaper reported, citing a consultant to the government commenting on the sidelines of the 12th China Mining Congress & Expo.

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China has gold reserves of 1,064 tons, 1.6 percent of the total foreign exchange reserves. That is more than that of 25 economies worldwide but far lower than the United States' 8,133 tons.

"The country may expand its gold reserves for a more diversified foreign exchange reserve other than the US dollar," said Chen Beilei, director of metals and mining at BOC International Holdings Ltd.

Chen said the relatively high price of gold cannot hold back consumers' purchasing decisions.

Feng Rui, chairman of the board at Silvercorp Metals Inc, predicted that the gold price will continue an upward trend despite small adjustments and will reach $1,600 an ounce in 2011.