China has been buying gold for 8 consecutive months and added 10 tonnes of gold to its boosted reserves of the precious metal in July, Bloomberg reported. Beijing has purchased 94 tonnes of bullion, considered a safe haven for investments, since the beginning of the year. According to the People's Bank of China, the country’s gold holdings reached about 1,945 tonnes, or 62.26 million ounces. It is worth about $90 billion at current prices of about $1,500 per ounce, APA reports citing Sputnik.
Despite efforts to produce a trade deal and put an end to their tariff spat, Beijing and Washington have become further mired in an economic row since US President Donald Trump announced his intention to tax $300 billion in Chinese goods. A new blow came several days later when POTUS blamed China for manipulating its currency.
In the meantime, the cost of gold has hit a six-year high amid the slowdown of global economies and central banks cutting interest rates. As analysts from Societe Generale pointed out, China went on a gold shopping spree to diversify its reserves away from the US currency and protect itself against the risks of the trade war.
"The growing threat of a currency war in recent days could add to this momentum and prove an overall tailwind for gold”, the group of analysts said.
The statement has been echoed by BMO Capital Markets managing director of commodities research Colin Hamilton, who also said that the PBOC’s move reveals de-dollarisation efforts.
“At the central bank level [the move] is definitely to de-dollarise”, Hamilton told Kitco News.
As the outlet points out, however, the relative size of China’s gold holdings still equaled $3.1 trillion last month.
Follow us on Telegram
t.me/apanewsaz
Follow us on Instagram
Follow us on TikTok
Follow us on Facebook
Follow us on X
