China's central bank continues to stock up on gold

China shocked the gold market a month ago by revealing its official reserves for the first time since 2009. It put to an end to years of speculation and rumours of Beijing quietly buying massive amounts of bullion.

The People's Bank of China said China’s gold reserves stood at 1,658 tonnes at the end of June, a rise of more than 600 tonnes over the six year period.

On Friday the country's central bank – which is battling credibility issues after its surprise devaluation of the renminbi turned out not to be a "once-off" – updated the figures again saying gold reserves increased 1.1% or 19 tonnes during the month of July to 1,677 tonnes.

Platts News reports it's a sign of greater transparency by China's central bank "ahead of a push by the country to be included in the International Monetary Fund's reserve currency basket."

China has surpassed Russia in the list of countries with the largest stash of the yellow metal, placing it in the fifth position, after the US, Germany, the International Monetary Fund, Italy and France, according to the World Gold Council.

Gold has benefitted from the turmoil on currency markets unleashed by the PBOC this week after the renminbi’s daily reference rate against the US dollar was lowered by 1.8%, the largest such adjustment in its history.

After subsequent falls the Chinese currency has now stabilized which also pushed gold off its highs for the week. Gold was last trading at $1,113 an ounce in New York, down slightly on the day, but well off near-five year lows of $1,084 struck last week.

Priced in renminbi, the price of gold is up 7% for the week.