China Going for the Gold... again

Bloomberg reports HERE that over the last 6 years China's GOLD holdings have increased by 76% to over 1,000 tons. China now has the 5th largest holding of the yellow stuff.

The U.S. has the world’s biggest gold holdings at 8,134 tons, followed by Germany with 3,413 tons, World Gold Council data show. France has 2,487 tons and Italy 2,452 tons, while the IMF has 3,217 tons.

China has been looking for ways to diversify away from dollar holdings by buying under valued commodities.

As previously reported, the IMF is about to sell 400 tons of gold. China is viewed as a likely buyer which would support prices.

Today gold jumped 1% to $912.

And according to the TELEGRAPH, "Inflows into ETFs up by more than 300% Figures from the World Gold Council show that investors appetite for gold showed no sign of abating with record inflows in to gold exchange traded funds."

Just about every economist will tell you that gold has no utility. It does not generate dividends. Even Warren Buffett has said, “It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

So given that all this is true, then why does just about every government on the planet continue to hold gold?

I'm continuing to hold about 10% of my IRA in the IAU and GLD ETFs. I don't trust all the paper currency being printed. Do you?