No gold rush for China

A top Chinese official said that China has muted interest in building up gold reserves, Reuters reported. The comments of Yi Gang, head of the State Administration of Foreign Exchange, caused global gold prices to fall US$3 within an hour of his speech. Yi said that while gold was "not a bad asset", the international market for the precious metal was limited and a buying spree by China would push up gold prices. Some investors expected China to buy the 191.3 tons of gold that has been put up for sale by the International Monetary Fund, following the lead of India, who bought 200 tons in November. But David Barclay, commodities analyst at Standard Chartered, said that China were more likely to buy small amounts on the open market than buy a huge chunk of IMF gold. Yi was typically cryptic about China’s intentions in the future, saying: "So, as for suggestions from many friends that we should increase gold holdings, we will give prudent consideration to this, according to market conditions."