Chinese Central Bank Resumes Gold Purchases in November After Six-Month Hiatus
Gold prices in November recorded their first monthly decline since June, driven by post-election sell-offs following Donald Trump’s victory.
China’s central bank resumed gold purchases in November after a six-month pause, according to official data released on Saturday.
The People’s Bank of China (PBOC), the world’s largest official sector gold buyer in 2023, restarted acquisitions, which may bolster Chinese investor demand. This demand had waned since the bank ended an 18-month buying streak in May.
China’s gold holdings increased to 72.96 million fine troy ounces by the end of November, up from 72.80 million ounces the previous month.
However, the value of China’s gold reserves fell to $193.43 billion at the end of November, down from $199.06 billion in October.
Gold prices saw their first monthly drop since June, losing 5% from their record high of $2,790.15 per ounce on October 31. Despite this, they remain up 28% for the year.
Gold Reserves
The PBOC’s resumption of gold purchases signals that it is comfortable with current record price levels and remains committed to accumulating reserves despite elevated costs.
Gold remains a critical component of China’s reserves strategy, serving as a hedge against the dollar’s fluctuations and a means to diversify away from reliance on U.S. assets. As global economic uncertainties persist, central banks like the PBOC view gold as a stable store of value and a safeguard against currency devaluation.
The PBOC’s renewed purchases signal confidence in gold’s long-term value and its role in shielding the country’s reserves amid record-high prices and a volatile global economic landscape.
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