China & Gold Values

China is currently the second-largest holder of U.S. Treasuries behind Japan, creating a need for China to create a stronger hedge against a weakening dollar. This follows a previous statement by Teng Tai, China's chief securities dealer, when he advised the country to increase its current gold reserve of roughly 600 tons to 2,500 tons in the near term and maintain around 3,000 tons over the long term.

Gold speculators have anticipated such a move for some time, as China's current gold position is only 1.4% of its total foreign exchange reserve, according to figures from the International Monetary Fund. This percentage ranks it the lowest among the top 15 central banks with bullion reserves, according to a recent report from Credit Suisse First Boston. A move to 2,500 tons would make it the fifth-largest bullion holder, behind countries like the United States and Germany. Gold speculators are partying over the possibilities.[tags] gold, spot gold, china, gold price, gold miner, gold nuggets[/tags] gold nuggets