MofCom researcher: China should buy more gold

A newspaper affiliated with China’s Ministry of Commerce has published an article calling for China to buy more gold to diversify its reserves, Bloomberg reported. The International Business Daily quoted Meng Qingfa, a researcher at the China Chamber of International Commerce, as saying China’s current 1,054 metric tons of gold reserve are inadequate compared with the US and Germany, which hold 8,133 tons and 3,408 tons, respectively. Meng said China’s foreign exchange reserves, most of which are held in dollar assets, are at risk when the US dollar depreciates, as is inevitable given US debt. China and India will drive demand for gold in the fourth quarter, as Indian and Chinese consumers tend to increase purchases of gold jewelry in the winter months. Chinese demand for gold has already gained in reaction to government measures to cool property speculation.