For six years, investors have been guessing how much gold China owns.
On Friday, they found out, and the results were underwhelming, Bloomberg reported.
China said it had boosted its bullion assets to about 1,658 tonnes, less than brokers had expected.
Futures dropped to their lowest level since 2010, as signs of improving US economic growth further diminished the metal’s appeal as a safe haven for investors.
Bulls had been holding out hope that buying from China could help to buoy demand.
The country is the world’s biggest gold producer and vies with India as the top consumer.
“I’m shocked by how small the figure is,” Ross Norman, chief executive of dealer Sharps Pixley, said by telephone from London, referring to China’s gold reserves.
“I don’t think I was alone in thinking they had accumulated three times as much.”
Gold futures for August delivery dropped 1 percent to settle at US$1,131.90 an ounce in New York, after touching US$1,129.60, the lowest since April 2010.
The reserve figures “were disappointing in some aspects and reflected that China isn’t adding gold as much as people thought it was,” Bernard Dahdah, a precious-metals analyst at Natixis SA in London, said in a telephone interview.
“It begs the question of what’s been happening to the gold produced that hasn’t been taken by the central bank.”
The metal posted a fourth weekly decline as US Federal Reserve chief Janet Yellen indicated that the central bank will increase interest rates this year amid the improving economy.
Higher rates cut the appeal of precious metals because they don’t pay interest or give returns like other assets, such as bonds and equities.
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