How China Is Driving Up Global Gold Prices
Thu April 11 2024
The price of gold is at a record high, not accounting for inflation, as central banks continue to buy up the metal frenetically, with the People's Bank of China leading the way. Economists say the trend reflects Beijing's goal of diversifying away from Western dollars to hedge against geopolitical headwinds.
Gold's value is in its liquidity, return characteristics, and resilience amid political turmoil, such as the Israeli-Gaza conflict, or economic downturns compared to other assets like stocks or currencies.
Gold has been on a bull run for the past two months. Analysts have attributed this in part to expectations the U.S. Federal Reserve is poised to loosen monetary policy, lowering interest rates. Recent demand for the metal has been driven primarily by central banks in emerging markets.
This is especially true of the People's Bank of China, which increased its gold reserves for the 16th straight month in February, according to available data for that month published by the World Gold Council.
Source: https://www.newsweek.com