China Should Buy Gold With Reserves, Central Bank Adviser Says – Bloomberg

From Bloomberg News (link)

China should use its foreign-currency reserves, the world’s largest, to buy and oil as a hedge to guard against the risk of a sudden drop in the U.S. dollar, said a member of the central bank’s advisory board.

China has about 1 percent of its reserves in gold, compared with more than 70 percent in the U.S., and rising demand may add to gains in the metal this year that pushed prices to a 26-year high. Booming exports and investment doubled Chinese reserves to $819 billion in the past two years, with economists estimating more than two-thirds of the cash went into U.S. Treasuries.

June 1, 2006 1:57 AM
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Categories: Economy