IMF gold purchase not feasible for China: CGA

BEIJING, Feb 24 (Commodity Online): China Gold Association (CGA) said Tuesday it is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility.

Instead the Association said the country would continue to shore up its gold reserves by acquiring gold mines abroad rather than purchases on the international market.

Reports earlier said China is a frontline runner to buy International Monetary Fund's remaining 191.3 tonnes of gold which is up for sale.

The IMF said last week that it would expand its bullion sales to the open market. Central banks from India, Mauritius and Sri Lanka had purchased 212 tonnes of the yellow metal from the institution last year.

Analysts said China would not hike its gold reserves given the limited quantity available on the market as gold is only a small portion of the nation's reserves.

According to China's State Administration of Foreign Exchange, the country held nearly 1,054 tonnes of gold reserves as of April last year, a value that equals 1.2 per cent of the nation's gross domestic product, but still far below the world average of 10 per cent.

Gold gained 24 per cent last year after hitting a record high of $1,227.50 an ounce in December as a weaker dollar boosted demand for it as an alternative investment.

China has been the world's largest gold producer since 2007 and closing in on India as the world's top gold consumer.