CHINA added to its gold reserves for an eighth consecutive month, with economic and geopolitical risks as well as a desire to move away from the US dollar driving the purchases.

People’s Bank of China (PBOC) holdings of bullion rose by 680,000 troy ounces last month, according to official data released on Friday (Jul 7). That’s equivalent to 23 tons. Total stockpiles now sit at 2,330 tons, with around 183 tons added in the run of buying from November.

China has been an enthusiastic buyer of gold, partly due to its desire to chip away at the dominance of the US dollar in global market. It’s also struggling with a disappointing recovery from the pandemic, and an increasingly strained relationship with the US.

Central banks around the world bought a record amount of gold last year – accounting for nearly a quarter of global demand – as inflation accelerated and monetary policy tightened. While purchases eased in the first quarter of 2023, some 24 per cent of monetary authorities intend increasing holdings over the next 12 months, according to a World Gold Council survey published in May.

The PBOC’s buying spree that began in November is the longest since a 10-month run that ended in September 2019. Prior to that, the last wave of inflows ended in late 2016.

Meanwhile, China’s end-June foreign currency reserves rose to US$3.193 trillion, up US$16.5 billion from the month before, the data showed. BLOOMBERG

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