Heard the rumour China is buying 6,000 tonnes of gold? It may not be as crazy as it sounds


Frik Els | August 17, 2012

Hedge fund gurus George Soros and John Paulson and central banks around the world are jumping back into the bullion market.

At MarketWatch, Myra P. Saefong, speaks to Kevin Kerr, president of Kerr Trading International, Brien Lundin, editor of Gold Newsletter and Mark O’Byrne, executive director at GoldCore about “unconfirmed speculation” that China – the world’s number one producer and second-placed consumer (at the moment) – is gearing up to buy up to at least 5,000 to 6,000 tonnes starting before the end of the year.

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There is also “the potential for greater demand from unreported purchases by the People’s Bank of China, should they decide to again report an increase in their gold holdings,” [O’Byrne] said.

[Kerr said] “If China buys this much gold, that would exceed annual, global production of gold, he said. “We do not have enough gold for China to buy that much, and it will take China time to purchase this amount of gold.”

“There’s a significant discrepancy between domestic gold demand in China and the level of Chinese gold imports and production, and apparently this gap is being made up by central bank gold purchases,” said Lundin.

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