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Updated 15:54 25/02/20

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China uncovers $15.2 billion of falsified gold transactions


Adam Pike, News Editor
26 Jun 2014, 10:36 a.m.

China’s chief auditor has uncovered $15.2 bn of loans backed by falsified gold transactions. A number of Chinese processors borrow money against the value of their gold and then invest the proceeds in riskier assets which they believe can provider a greater return. Most of the financing deals are legitimate, however, rumours are circulating that some of the deals were based on fake transactions.

According to the World Gold Council Chinese firms have used up to 1,000 tonnes of gold as collateral against loans. Based on the current gold price this would equate to $42 bn. The audit also discovered issues relating to the countries cotton, corn and coal reserves.

Mark To, research analyst at Wing Fung Financial Group does not expect the news to impact Chinese gold demand.

View original source at: www.reuters.com

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