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China, the world’s second-largest economy, increased its gold reserves in March for a fifth month in a row, as central banks globally continue to pile up reserves of gold in the face of high inflation and heightened geopolitical risks.
The People’s Bank of China boosted its gold reserves by around 18 tons last month, per data from the central bank cited by Bloomberg.
The officially reported Chinese reserves of gold now stand at 2,068 tons, having increased in each of the past five months.
That’s the longest period in which China has been consistently buying gold for months since a ten-month period that ended in September 2019.
Central banks globally have been buying gold for months, with reported global gold reserves rising by 52 tons during February – the eleventh consecutive month of net purchases – following the 74 tons central banks added in January, according to data from the World Gold Council.
In the first two months of 2023, central banks reported net purchases of 125 tons, which was the strongest start to a year back to at least 2010 – when central banks became net buyers on an annual basis, the council said this week.
The largest single purchase in February was reported by the People’s Bank of China, which added 25 tons of gold in that month. Turkey, Uzbekistan, Singapore, and India also added gold reserves in February.
This week, gold prices were on track for a weekly gain as weaker U.S. economic data weighed on economic sentiment. Spot gold prices jumped to above the $2,000 per ounce mark this week, following the surge in oil prices after the OPEC+ group announced an additional cut of 1.66 million barrels per day (bpd) between May and December 2023.
“Ahead of the nonfarm payroll report, gold got hit by profit-taking as too much of the trading world was closing up shop for the long weekend. This was a one-way gold move and bullion traders didn’t want to be caught on the wrong side of this trade when the markets reopen next week,” Ed Moya, Senior Market Analyst, The Americas at OANDA, said on Thursday.
“The bull case remains for gold, but traders need to see how the market reset next week.”
By Tsvetana Paraskova
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.