China extends its gold shopping spree to five months, buying 18 tonnes in March
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(Kitco News) -China’s appetite for gold remains insatiable as the latest data from the People’s Bank of China bought 18 tonnes of gold last month.
China’s gold shopping spree hit its fifth consecutive month; Krishan Gopaul, senior European, Middle East and Asian market analyst, said that since November the nation has bought 120 tonnes of gold.
“Total gold reserves now amount to 2,068 tonnes,” he said in his Twitter comment.
Data from the People's Bank of China shows an 18 tonne increase in its official #gold reserves March. Now five consecutive months of buying, totalling 120 tonnes. Total gold reserves now amount to 2,068 tonnes. pic.twitter.com/wjTxJb3Qvm— Krishan Gopaul (@KrishanGopaul) April 7, 2023
According to many analysts, China’s dominating presents in the precious metal market is completely changing the investment landscape, creating solid value for investors.
Bob Minter, director of ETF Investment Strategy at abrdn, said that in the current environment, with solid support in the market, its only a matter of time before gold prices hit new record highs. He also added that with so much uncertainty surging through financial markets having an overweight position in gold would be a good insurance policy.
China’s latest gold prices were made as gold prices rose more than 7% last month and prices saw its highest monthly closing price on Record.
Analysts note that China is expected to continue to increase its official gold reserves as it builds international credibility for the yuan. China continues to make important strides as it competes with the U.S. dollar as a world reserve currency.
In a recent interview with Kitco News, Paul Wong, market strategist at Sprott, said that the dedollarization trend is not going away anytime soon and is providing long-term support for gold. He noted that nations have to be strategic as they diversify their holdings and can’t just dump all the U.S. dollars they are holding.
“if you are breaking into different economic blocks, and tensions arising across the board, cross the political spectrum, you want to get off those US dollar assets, your only choice is to buy gold.”
China’s latest reserve update comes after, Global gold reserves increased by 52 tonnes in February, rising for the 11th month in a row, the WGC said last week.
Year-to-date, central banks' net purchases stand at 125 tonnes. "This is the strongest start to a year back to at least 2010 – when central banks became net buyers on an annual basis," said Gopaul in the report.
|Central bank gold buying update: 2023 sees the strongest start to a year in more than a decade|