China's retreat from gold
Even China can't stomach spending too much money buying gold at record levels - something the players in the gold market forgot when they reported this week that the country's central bank made another purchase in April. Rather than a significant buy, the reported purchase of just 60,000 ounces was the lowest in at least 18 months (since China returned to the gold market in November 2022).
That's less than two tonnes of gold (there are 35,274 ounces in a tonne) and less than half of the 160,000 bought in March, and only a fraction of the 390,000 ounces purchased in February.
First-quarter purchases by the world's central banks, led by China and Turkey in particular, were the strongest on record, according to the World Gold Council. However, if China's April performance is any indication, central bank buys will be lower in the next report.
The surge in gold prices to close to $2,450 an ounce in April evidently made China retreat. Comex data shows the price peaked at $US2,448.80 an ounce, a price too steep for most but the wealthiest gold bugs.
Foreign exchange data for April showed that China held 72.80 million ounces of gold at the end of last month, up from 72.74 million ounces a month before.
The value of China's gold reserves rose to $US167.96 billion from $US161.07 billion, illustrating the impact of April's price rise on values.
The People's Bank of China was the largest official sector buyer of gold last year, with net purchases of 7.23 million ounces or 224.9 tonnes, according to the World Gold Council.
The decline in purchases last month shows that even for China, every deal has a price, and some are just too steep.
Source: https://www.finnewsnetwork.com.au/