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Home Gold News China’s Central Bank Suspends Gold Purchases for Fourth Consecutive Month

China’s Central Bank Suspends Gold Purchases for Fourth Consecutive Month

by anna

In August, China’s central bank refrained from increasing its gold reserves for the fourth month in a row, as revealed by official data on Saturday.

The People’s Bank of China (PBOC) reported that its gold reserves remained steady at 72.8 million fine troy ounces by the end of August. Despite this, the value of these reserves grew to $182.98 billion from $176.64 billion at the end of July.

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This year has seen a rise in gold prices, fueled by expectations of potential US interest rate cuts and a surge in safe-haven demand amid ongoing geopolitical and economic instability. Central banks globally have increased their gold acquisitions, contributing to a 21% rise in gold prices this year, which are now nearing the record high of $2,531.60 set on August 20.

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Before this halt in purchasing, the PBOC had been acquiring gold continuously for 18 months. In 2023, it emerged as the largest single gold buyer worldwide. The decision to pause purchases has also dampened gold demand among Chinese investors in recent months.

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Analyst Carsten Menke from Julius Baer suggests that the PBOC is likely to resume gold purchases in the future. This anticipated move is expected to be motivated more by political factors—such as reducing dependence on the US dollar—rather than purely economic considerations.

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