The tariffs war makes China to ratchet up the gold stockpiles. Basically, the precious metal has always had a special place in the reserves of the People’s Bank of China regardless of trade conflicts. In the past six years the government has been actively buying gold. The only month when purchases were not made was September 2016. In May this year, the monthly volume of purchases hit the highest level in over two years.
“It’s a diversification away from the US dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,” said Bart Melek from TD Securities. “We have to remember that gold is nobody’s liability.” Such a robust gold-buying spree pushed China to the top places in the list of the countries having the largest bullion reserves such as Russia and India. Remarkably, even these high levels can be inaccurate as some experts estimate that the real volumes of China’s gold stockpiles are much bigger.
Amid these facts, it is quite logical that the London Bullion Market Association decided to hold an annual conference in the Chinese city of Shenzhen. Surely enough, participants of this event will have a lot to discuss, bearing in mind a large scale of the Chinese bullion market. Such an issue as the pricing on this market can also be relevant at the conference. Nowadays, the prices are still formed on the commodities exchanges in London and New York. Probably, it is because this way is more convenient for China.
