SHANGHAI (Reuters) – China’s central bank has been reluctant to buy gold for its reserves for a fifth straight month in September, official data showed on Monday, mainly due to a rise in prices for the yellow metal.
China’s gold reserves amounted to 72.8 million troy ounces at the end of last month. However, the value of gold reserves rose to $191.47 billion from $182.98 billion at the end of August.
Gold prices are up about 28% so far this year – on track for their biggest annual gain in fourteen years – supported by the start of rate cuts by the US Federal Reserve, geopolitical tensions and robust demand from central banks.
Global central banks, which actively bought gold in the 2022-2023 period, are on track to slow purchases in 2024 from 2023, but keep them above pre-2022 levels, according to the World Gold Council.
This is partly due to the pause in purchases by the People’s Bank of China (PBOC), which had bought gold for 18 consecutive months until May.
The central bank was the world’s largest official buyer of gold in the sector in 2023, and its decision to delay purchases dampened demand from Chinese investors in recent months. “With higher gold prices, the PBOC continues to hold off on new purchases. We think the central bank would like more gold, but is waiting for a more attractive entry point,” said WisdomTree commodity strategist Nitesh Shah.
“However, with global interest rates falling and geopolitical tensions rising, it appears they will have to wait some time for a price drop. Given our forecast that prices will rise above $3,000/oz in the coming year, the central bank may want to consider building positions earlier.”
(Reporting by Qiaoyi Li, Ryan Woo and Casey Hall; Editing by Muralikumar Anantharaman & Shri Navaratnam)
