Adviser: China should buy more gold

March 13, 2011 - 0:0
BEIJING (Xinhuanet) -- A Chinese government adviser has recommended that the country use some of its $2.85 trillion of foreign exchange reserves, to buy more gold. Li Yining, a senior economist at Peking University and a CPPCC member, says China should use the precious metal to hedge against risks of foreign currency devaluation. Despite many academics making similar calls, an official with the country's foreign exchange administration recently said it wasn't possible for China to make big purchases in the spot gold market. He said that was because the government is afraid of squeezing out ordinary buyers, and pushing up the gold market prices. According to the People's Bank of China, the country's state gold reserves have been held at 33.9 million ounces since April 2009.