China’s PBOC keeps gold buying on hold for second month

GOLD fell after its biggest weekly advance in three months, with central bank purchases and European equities in focus.

Bullion traded near US$2,359 an ounce after rallying by almost 3 per cent last week. The People’s Bank of China (PBOC) did not add to its reserves for a second consecutive month in June, according to the World Gold Council. That may be a cause of concern for investors, said Giovanni Staunovo, a research analyst at UBS Switzerland.

While bullion declined on Monday (Jul 8), European stocks trimmed losses as traders digested the unexpected result of France’s snap election.

In the lead-up, investors were concerned about the possibility of a far-right takeover with the possibility of major policy changes. But there is some relief as an inconclusive outcome potentially constrains the influence of both the left-wing coalition and Marine Le Pen’s National Rally.

Gold fell 1.4 per cent to US$2,358.95 an ounce in London at 6:40 pm local time. The Bloomberg Dollar Spot Index was little changed, as were 10-year Treasury yields. Platinum, silver and palladium also declined. BLOOMBERG