Yi Gang: China to Invest More Forex in Gold Cautiously

China will consider investing more of its foreign exchange reserves in gold "cautiously" based on market conditions

China will consider investing more of its foreign exchange reserves in gold "cautiously" based on market conditions, Yi Gang, vice governor of the People's Bank of China (PBC) and head of the State Administration of Foreign Exchange (SAFE) told at a conference when interviewed on foreign exchange management and foreign exchange reserves.

China's gold reserve amounts to 1,054 tons, ranking fifth in the world. China has purchased more than 400 tons of gold in the past few years at reasonable prices.

China is the largest gold producer in the world, with more than 300 tons of gold produced annually. China is also the second largest gold consumer in the world, with a consumption of over 400 tons of gold a year, second only to India.

It is conservatively estimated that there are far more than 3,000 tons of gold accumulated among Chinese people.

"Gold is not a bad asset, but currently a few factors limit our ability to increase foreign-exchange investment in gold," said Yi Gang.