Despite all its recent talk about being down on the dollar, China hasn’t been building its gold reserves as quickly as it’s been amassing U.S. dollar. China has added 454 metric tons to its gold reserves since 2003 when it said reserves totaled 600 metric tons. Purchases were made off the exchange as private transaction.

Commodity markets hit their highest levels for months on Thursday after the US Federal Reserve gave nascent investor confidence a fillip by unveiling plans to buy more government bonds and mortgage debt.

Gold futures fell Thursday for a fourth straight session to near $940 an ounce as higher stock markets and crude prices reduced safe-haven buying.

Look to the gold sector for good news from Canadian miners. While base metal, coal and potash producers continue to trim output, companies such as Vancouver’s Goldcorp have recorded record quarterly production. Gold output at all of the company’s operations was 692,000 oz during the last quarter, bringing the 2008 total to 2.3 million oz.

Nor is that the only good news from Goldcorp. Although the calculation of operating costs for 2008 has not yet been completed, the company expects total cash costs will be $300/oz of gold on a byproduct basis.

Gold prices rebounded Friday as the dollar gave back some of its recent gains and fell against other major currencies. Energy prices slipped, while agriculture futures rose.

Gold, which investors often use as a hedge against inflation, tends to move inversely with the dollar. The greenback has gained strength in recent months as currencies around the world weakened due to the worsening economic outlook. But the dollar changed direction Friday, falling against the euro, British pound and Japanese yen in response to the U.S. government’s latest efforts to help prop up the ailing financial industry.