China’s Central Bank Pauses Gold Purchases for Second Consecutive Month

China’s Central Bank Shuns Gold for Second Consecutive Month

In a surprising move, China’s central bank did not add to its gold reserves for the second month in a row, despite the precious metal hitting record highs. Data released by the People’s Bank of China revealed that its gold holdings remained static at 72.8 million troy ounces at the end of June.

This break in China’s 18-month gold-buying spree has raised eyebrows among analysts, who had previously predicted that the trend of increasing reserves would continue. However, some experts believe that the hiatus may be temporary, as China aims to diversify its reserves and protect against currency devaluation. In fact, a World Gold Council report indicates that around 20 central banks are looking to boost their gold holdings in the near future, citing escalating geopolitical tensions and financial uncertainties as key drivers.

Related:  Dimon Warns of Severe Consequences if Private Credit Fails

The recent slowdown in gold purchases may be attributed to the soaring prices of the precious metal, which peaked above $2,400 per ounce in May. Since then, gold prices have slightly retreated as investors adjusted their expectations regarding US interest rate cuts for the year. When the People’s Bank of China announced its decision to halt gold acquisitions in May, the market experienced a sharp drop, marking the largest intraday decline in nearly three years.

While China’s temporary halt in gold purchases may have caught some off guard, the broader trend of central banks increasing their gold reserves suggests that the precious metal remains a valuable asset for safeguarding against economic uncertainties. As geopolitical tensions simmer and market volatility persists, investors may continue to turn to gold as a safe-haven asset in times of turmoil.

Related:  Market Talk - July 12, 2022

With unique insights and expert analysis, Extreme Investor Network remains a trusted source for staying ahead of the latest trends in finance and investing. Stay tuned for more updates on the dynamic world of gold and other alternative assets.