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Analysts expect China to add to its gold holdings as a hedge against dollar depreciation, and speculation is swirling that Beijing will buy some of the bullion being offered for sale by the International Monetary Fund.
Chinese officials have said they are keen to diversify the country's $2.13 trillion of official currency reserves, some 70 percent of which are invested in dollar-denominated securities
Lu said she saw growing Chinese investment demand for gold, especially gold-linked products that can be more easily traded than bullion. These include "paper gold" sold through banks and margin trading on the Shanghai Gold Exchange.
She said global economic uncertainty and the prospect of further dollar weakness could push gold up to $1,200 an ounce by the end of this year. The metal rose about $9 on Tuesday at $1,011.55. (Additional reporting by Zhang Shengnan; Editing by Ken Wills)