China’s PBOC Keeps Gold Buying on Hold for Second Month
Mon July 08 2024
Gold steadied after the biggest weekly advance in three months, with central-bank purchasing patterns in focus.
Bullion traded near $2,385 an ounce after rallying by almost 3% last week. The People’s Bank of China didn’t add gold to its reserves for a second month in June, but a report from India suggested the nation’s central bank probably increased its bullion reserves by the most in almost two years.
Gold has soared this year — hitting a record in May — as central-bank buying lifted prices, with policymakers in countries including India, China and Singapore seeking to diversify reserves. The precious metal has also been supported by bets the US Federal Reserve will start to cut interest rates as inflation cools, as well as geopolitical tensions.
“Some pullback in gold prices” shouldn’t be ruled out following the PBOC data, said Christopher Wong, a foreign-exchange strategist at Oversea-Chinese Banking Corp. “But it is not uncommon for China to temporarily halt purchases, given that gold prices have rallied quite sharply.”
Bullion held by the PBOC was unchanged at 72.8 million troy ounces at the end of last month, according to figures released on Sunday. The central bank opted not to add to reserves in May, ending an 18-month buying spree.
The Reserve Bank of India added more than nine tons in June, based on calculations using weekly data, according to Krishan Gopaul, an analyst at the World Gold Council. That’s the most since July 2022, and means India’s reserves have expanded by 37 tons this year to 841 tons, he said in a social media post.
Spot gold slipped 0.3% to $2,385.55 an ounce at 10:40 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver held above $31 an ounce after jumping by more than 7% last week, while palladium and platinum fell.
It’s possible that soaring gold prices have deterred purchases by the PBOC, according to Charu Chanana, a strategist at Saxo Capital Markets Pte in Singapore. Still, there’s further upside for gold amid increasing hopes for looser monetary policy this year, as well as ongoing geopolitical risks, she said.
Source: https://finance.yahoo.com/