China Resumes Monthly Gold Buying in Bid to Diversify ReservesBloomberg News
China, the world’s biggest producer and consumer of gold, added about 500,000 ounces to central bank reserves in June, restarting monthly purchases to diversify holdings after taking a breather in May.
The People’s Bank of China increased assets to 58.62 million ounces, or about 1,823 metric tons, from 58.14 million ounces in May when they were unchanged, according to data on the central bank’s website. The country has boosted its hoard in 11 out of the past 12 months after announcing a 57 percent increase to 53.32 million ounces since 2009.
China bought gold during a month when global prices climbed 8.8 percent, boosted by the U.K. vote to leave the European Union and a further scaling back of expectations for a rise in U.S. interest rates. Bullion has surged 29 percent this year as investors sought a shelter from market turbulence and increasing global economic and political risks. Assets in exchange-traded funds jumped 37 percent in 2016 to more than 2,000 metric tons.
“China renewed purchases despite a spike in prices, signaling that the nation is still looking to diversify its foreign exchange reserves in a steady manner,” Zhang Yanxin, an analyst at Shanghai Flow International Trade Co., said by phone. “But the amount is relatively insignificant in a global context,” Zhang said, noting it was about 15 tons whereas ETF assets jumped more than twice that number in a single day this week.
— With assistance by Feiwen Rong