Beijing In No Rush To Buy IMF’s Gold

People close to the central bank are pouring cold water on the idea that China should buy the large stock of gold the International Monetary Fund is looking to unload. Li Yang, a former advisor to the bank, was quoted by Reuters as saying it would be cheaper to buy domestically mined gold than buy it from the IMF, which last month sold 200 tonnes to India at $1,045 an ounce (which adds up to a total bill of $6.7 billion). Not that China couldn’t afford a similar purchase given its $2.3 trillion in foreign reserves, but the very size of those reserves also undermines what would be the main reason for buying the metal, to diversify away from the dollar. It just wouldn’t make that much difference. And apart from being nice to the IMF, why buy its gold when the metal is selling at record prices? In April, China, which is the world’s top producer and consumer of the metal, said it held 1,054 tonnes of gold, an increase of 76% from its previous announced stock six years ago.

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