GOLD NEWS

China’s PBOC Keeps Gold Buying on Hold As Prices Hit Record

Wed Aug 07 2024

China’s central bank didn’t buy any gold for a third straight month in July, as the precious metal surged to record high. Bullion held by the People’s Bank of China was unchanged at 72.8 million troy ounces at the end of last month, according to official data released on Wednesday. This is the third month of no reported purchases — the central bank in May ended an 18-month buying spree that helped drive strength in bullion.

The ongoing halt to purchases by the PBOC suggests that soaring prices are deterring the world’s central banks. Singapore even reduced its gold reserves in June by most since at least 2000, and the World Gold Council has said state-backed demand in the second quarter slumped 39% compared with the first three months of the year.  However, some analysts believe central-bank buying will remain a key driver for bullion, saying the PBOC is likely to resume the purchases as as it seeks to diversify reserves and guard against weak currency.

The precious metal reached an all—time high in July as traders ramped up bets on monetary easing from the Federal Reserve. In China, high prices have dampened retail sales of discretionary items like jewelry, but gold bars and coins are increasingly popular as investors seek to safeguard their wealth from a weak economy.

Strong physical bar buying, particularly by family offices in Asia, helped gold demand register its best second quarter in at least 25 years, according to the World Gold Council.

Source: https://www.bnnbloomberg.ca/