Back in December, as always happens every year for the past 3, a margin call driven liquidation wave pushed the price of the gold to multi-month lows, providing merely yet another lowball buying opportunity (for which let's all thank John Paulson, again). One buyer who certainly would love to thank whichever marginal seller was liquidating their gold, is none other than China, which as was reported a few hours ago, imported an all time record 114.4 tons of gold in the month of December, or more than all the gold held by the Greek central bank (assuming it hasn't been confiscated by ze Germans or the ECB, or deposited in G-Pap or Venizelos' private HSBC safe in Geneva yet: a very aggressive assumption).

This means that for all of 2012, total China imports of gold have hit a staggering 834.5 tons, double the 431 tons in 2011, and that the PBOC's determination, whose official holdings are still a laughable 1054 tons, when in reality they are likely 3-4 times greater, to convert to a commodity-backed currency the day it decides to become the world's reserves currency, as we predicted back in 2011, is as steadfast as ever. Recall from the December 2009 edition of China Youth Daily, which we reported previously that State Council advisor Ji was saying "that a team of experts from Beijing and Shanghai have set up a "task force" last year to consider growing China's gold reserves. "We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the paper quoted him."

David Fuller's view I think the last sentence above will prove to be correct. Surely China will continue to build its gold reserves until they comfortably exceed those of the USA.

Meanwhile, the UK languishes in 18th place with only 310.3 tonnes of bullion reserves. UK citizens, never forget that Labour Prime Minister Gordon Brown sold "60% of the UK's gold reserves (395 tonnes) for an average price of $275.6 an ounce" between 1999 and 2002.


I still get steamed up about this whenever I think about it. Consequently, every time I am annoyed by the intolerance or arrogance of some out of touch Conservative Party backbenchers, or the current Prime Minister's wind farm follies, any reckless temptation to switch my vote is instantly nullified by recalling Gordon Brown's destructive policies. Unfortunately, his lieutenants currently have a commanding lead in public opinion polls.