Central Bank Gold Purchases

Reports of elements within the Chinese financial bureaucracy imposing a government-sanctioned gold acquisition program began to come up in late two thousand-three. Until now, nothing concrete has been announced, but gold market sources in Asia believe that China could join the market as an official buyer at any time, using the immense reserve disparity between its gold reserve and dollar allocations as a justification in early two thousand-four, the Japanese Minister of Finance, Sadakazu Tanigaki, shocked financial markets in saying that it would be more consistent with those of the other industrialized nations, for example, Japan holds about two percent of its reserves in gold, and Europe holds over forty percent in gold. That statement, along with similar statements from Chinese monetary authorities in recent months, amounts to a warning shot across the bow for gold market participants – official sector gold purchases from the two Asian economic giants are a distinct possibility in the coming years.