Since setting a record high of US$2,450 per ounce in May, gold prices have been volatile. Gold started July at about US$2,330 before rallying 3 percent last week to US$2,390, marking the most significant weekly gain in three months.
However, it fell back down following the news of the PBOC’s decision to hold off on bullion purchases.
Prior to its lack of purchases in May, the PBOC had purchased gold each month since January 2023. As of June, the PBOC’s gold holdings total 72.8 million troy ounces, or 2,063 metric tons (MT).
This demand was spread among many countries. Central banks in East and Central Asia, including China, Turkey and India, accounted for the majority of net purchases in Q1 2024.
Market specialists have held that China’s pause in gold acquisition can be expected following rallying gold prices.
Christopher Wong, a foreign-exchange strategist at Oversea-Chinese Banking, told Bloomberg, “(I)t is not uncommon for China to temporarily halt purchases, given that gold prices have rallied quite sharply.”
As of 4 p.m. PDT on July 9, the spot gold price stood at US$2,364.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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