Experts have agreed that enhancing China’s gold reserves as well as the gold trading market would be helpful to the internationalization of China’s renminbi, the Xinhua News Agency reported.
Chan Sheung Chi, president of the Chinese Gold and Silver Exchange Society, said this is because of gold's unique functions in preventing risk and avoiding inflation.
The current gold price is $1,177.50 an ounce on Comex. The London Bullion Market Association predicted that the average gold prices could drop to $1,159.88 an ounce around this time next year, a little lower than current prices.
The precious metal recently enjoyed an extended period of gains due to delays on the Federal Reserve's plan to hike in interest rates.
During the forum co-organized by the Asia-Pacific regional bureau of the Xinhua News Agency and First Asia Merchants Bullion on Monday, Oct. 19, Chan said that although the gold trading market in China went through a reform and opening-up process, the market could still be improved for better integration with the international market.
At the forum, experts shared the view that the gold reserves' more important role lies in risk prevention, which could help boost confidence in a country's currency, and reflects the country's economic and financial strength.
Dr. Chan Fung Cheung from the City University of Hong Kong expressed confidence on the future of the Chinese currency.
As the world's largest gold producer and a major gold consumer, China has surpassed Russia to become the fifth-largest holder of gold reserves around the world, behind the United States, Germany, Italy and France, the report said.
China's central bank said that the gold reserve increase was in line with the adjustments of the structure of its international reserves assets that would safeguard the liquidity, assets security and value increase.
The central bank added that it would make adjustments on gold holdings depending on its reserves and investment needs in the future.