SHANGHAI (Reuters) – China’s central financial institution held again on shopping for gold for its reserves for a fifth straight month in September, official information confirmed on Monday, primarily attributable to a surge in costs for the yellow steel.
China’s gold holdings stood at 72.8 million troy ounces on the finish of final month. The worth of the gold reserves, nevertheless, rose to $191.47 billion from $182.98 billion on the finish of August.
Gold costs have risen round 28% to this point this yr – heading for the most important annual acquire in 14 years – underpinned by the beginning of U.S. Federal Reserve rate of interest cuts, geopolitical tensions and strong demand from central banks.
International central banks, which actively purchased gold in 2022-2023, are on observe to sluggish purchases in 2024 from 2023, in line with the World Gold Council, however to maintain them above the pre-2022 stage.
That is partly because of the pause in purchases by the Individuals’s Financial institution of China (PBOC), which till Might had purchased gold for 18 consecutive months.
The central financial institution was the world’s largest official sector purchaser of gold in 2023 and its choice to place its shopping for on maintain muted Chinese language investor demand in latest months. “With increased gold costs, the PBOC continues to pause from new purchases. We imagine the central financial institution would really like extra gold however is ready for a extra enticing entry level,” mentioned WisdomTree commodity strategist Nitesh Shah.
“Nevertheless, with international rates of interest falling and geopolitical tensions rising, it seems like they might have to attend for a while for a worth dip. Given our forecast of costs rising to over $3,000/oz within the coming yr, the central financial institution could need to contemplate constructing positions earlier.”