China Buys North Korea’s Gold Reserves As South Korea Increased Gold Reserves By 30 Percent

China Buys North Korea’s Gold Reserves As South Korea Increased Gold Reserves By 30% (ZeroHedge, Sep 25, 2012):

The IMF reported that various countries continued diversifying into gold in July, some significantly.

South Korean gold reserves rose a sharp 16 tonnes for a 30% increase in total gold reserves.

Paraguay became the latest central bank to begin diversifying into gold. Their gold reserves rose sharply – from a few thousand ounces to over 8 tonnes.

Desperate North Korea has exported more than 2 tons to gold hungry China over the past year to earn US $100 million. Even in tough times during the Kim Il-sung and Kim Jong-il regimes, North Korea refused to let go of its precious gold reserves.

Chosun media reports that “a mysterious agency known as Room 39, which manages Kim Jong-un’s money, and the People’s Armed Forces are spearheading exports of gold, said an informed source in China. “They are selling not only gold that was produced since December last year, when Kim Jong-un came to power, but also gold from the country’s reserves and bought from its people.”

This is a sign of the desperation of the North Korean regime and also signals China’s intent to vastly increase the People’s Bank of China’s gold reserves.

Data on the International Monetary Fund’s website shows Kazakhstan’s assets rose 1.4 tons to 104.4 tons last month, Turkey’s gold reserves gained 6.6 tons to 295.5 tons, Ukraine’s rose 1.9 tons to 34.8 tons.

While the Czech Republic’s bullion assets fell 0.4 ton to 11.8 tons, data shows.

Nations bought 254.2 tons in the first half of 2012 and may add close to 500 tons for the year as a whole, the London-based World Gold Council said earlier this month.

The trend among central banks to diversify their foreign exchange reserve holdings with gold continues.

This trend is very sustainable considering the still tiny allocations creditor nation’s banks, with massive foreign exchange reserves, have to gold.

Paraguay is a new central bank gold buyer – expect many more central banks to begin increasing their gold reserves in the coming months.

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