Beijing: While the indications of the trade war between the United States and China have been flaring up further, China has aggressively started augmenting its Gold reserves. Since December last year, China has been on a gold buying spree and over just six months, has purchased a whopping 74 tonnes of gold. This Chinese purchase, when the gold rates are on a consistent rise, since the beginning of this year, becomes noteworthy.
As per the information divulged by the World Gold Council, the premier institution in the Gold market, China has taken its Gold reserves to 1,916 tonnes. The gold purchased in the last six months has contributed substantially to these reserves. Before this period, from November 2016 to December 2018, China had not revealed any official information regarding its gold reserves. Therefore, the other countries and organisations have been keenly following these gold purchases by China.
The Gold rates have shown a consistent rise since the last few months. Interestingly, gold rates reached a record level of $ 1,406, on Monday, which was the highest in the previous six years. At the same time, it is claimed that this is for the first time that the gold rates have been showing an upward trend, for five successive months. As per analysts, gold purchase by the second largest economy of the world like China that too during the surge in its rate indicates the arrival of a new currency.
Since the last few years, China, along with Russia, had initiated efforts to challenge the domination of the US dollar openly. A few months ago, Russian President Vladimir Putin, had drawn the world’s attention with a statement that the trust in the US dollar is on the decline. Although China has avoided commenting openly against the United States, the decisions taken by China over the last four years are considered to be indications of anti-US-dollar policy. They include independent systems for oil and gold trade, the inclusion of Yuan in the reserve currency, increased gold production and growing closeness with Russia.
Senior officials from countries like the United Kingdom have made statements that the Chinese Yuan can become the currency to challenge the US dollar, as the global currency. On the other hand, claims that Russia and China are trying to launch a currency backed by gold are being made. Furthermore, while China is increasing its Gold reserves, Russia too has added 78 tonnes of gold to its reserves.