Rumours about this had been running for a number of years. We already knew China wanted the build the ‘largest gold reserves, in the shortest possible time’. But now we know ‘storing gold by the people’ is part of their strategy. Proof of this we found on the website the People’s Bank of China in an interesting Q&A regarding China’s gold strategy. But when we revisited the page recently to write this blog the text has disappeared. Here the most interesting part of the Q&A which we have filed fortunately.

答：黄金储备一直是各国国际储备多元化构成的一个重要内容，大多数央行的国际储备中都有黄金，我国也是这样。黄金作为一种特殊的资产，具有金融和商品的多重属性，与其他资产一起，有助于调节和优化国际储备组合的整体风险收益特性。我们从长期和战略的角度出发，根据需要，动态调整国际储备组合配置，保障国际储备资产的安全、流动和保值增值。

A: The gold reserve has been an important element of international reserve diversification used by governments. Most central banks international reserves include gold, so are we. Gold is a special asset with multiple attributes such as financial and commodity-wise, and together with other assets it helps regulate and optimize the overall risk-return of our international reserves portfolio. From the perspective of long-term and strategic perspective, if necessary, we dynamically adjust international reserves portfolio to ensure its safety, liquidity and return on investment.

六、近年来，国际黄金价格波动性较大，我国此轮增持的黄金储备是在什么时候从什么渠道增持的？未来是否会继续增持？

6: In recent years, international gold prices are volatile. When and from which channel is the current round of gold holdings added to the reserves? Will the future see more holding?

答：与其他商品和金融资产的价格一样，国际黄金价格也有涨有落。过去几年，黄金价格在持续攀升到历史高点后，逐步回落。我们基于对黄金的资产价值评估和价格变化分析，在不对市场造成冲击和影响的前提下，通过国内外多种渠道，逐步积累了这部分黄金储备。增持渠道主要包括国内杂金提纯、生产收贮、国内外市场交易等方式。

A: Like prices of other commodities and financial assets, the international gold prices also has its ups an downs. Over the past few years, gold prices has climbed to a record high, then gradual decline. Based on our valuation and price changes analysis, under the premise of not influencing the market, we use a variety of channels both at home and abroad, and have gradually accumulated this gold reserves. Channels include domestic gold purification, production and stocking up, trades at home and abroad, etc.

黄金具有特殊的风险收益特性，在特定时期是不错的投资品种。但黄金市场的容量与我国外汇储备规模相比较小，如果外汇储备短时间大量购金，易对市场造成影响。目前，中国已成为世界第一大黄金生产国，也是黄金消费大国， “藏金于民”的情况一直在发生。未来需继续统筹考虑我国民间投资需求与国际储备资产配置需要，灵活操作。

Gold has a special risk-return characteristic, and at particular time is a good investment choice. But the capacity of the gold market is small compared with the scale of China’s foreign exchange reserves, and if a large number of foreign exchange reserves is used to buy gold within a short period, it will easily affect the market. At present, China has become the world’s largest gold producer, and is also a big gold consumer. “Storing gold by the people” has been the current situation. We need to continue considering in the future our domestic demand for private investment and international reserve need and be flexible.

This is further confirmation of China’s wish to become the central player in the gold market. Earlier in a speech September 18, 2014, Governor Zhou Xiaochuan, while attended the launch ceremony of the International Board of the Shanghai Gold Exchange, explained The launch of the International Board of the SGE would help to facilitate the RMB-denominated price discovery function in the gold market, This means it is China’s wish to move this price discovery function from the COMEX, US futures markets in Chicago to the SGE. The Chinese seem to be well aware of the US paper gold game.