China buys gold for the eighth straight month


By: Neils Christensen

Date: July 10, 2023

China continues to dominate the gold market, according to the latest data from the nation’s central bank.

In a post on Twitter, Krishan Gopaul, senior analyst for the World Gold Council, said that the People’s Bank of China bought 21 tonnes of gold in June, citing updated data from the central bank.

“This is the eighth consecutive month of buying, totaling 165 tonnes. Total gold reserves now amount to 2,113 tonnes,” he said.

Over the last several months, analysts have noted that China’s consistent demand for gold is part of a tactic to bring more international credibility to the yuan. At the same time, China’s buying is part of a more significant de-dollarization theme globally.

“China doesn’t want to hold dollars for trade as they have struck a number of trade deals with major commodity suppliers from pulp to oil around the world that are specified to trade and settle in renminbi,” said Ralph Aldis, Senior Gold Portfolio Manager at U.S. Global Investors.

Aldis added that he expects that China’s new gold buying spree has just started. He noted that China has the fifth biggest gold reserves in the world. 

“I think you have to benchmark their eventual holdings against the U.S., which stands at 8,133.46 tonnes,” said Aldis, “I think China would need to perhaps double their holdings from its current level to going to the second largest holder to have much more alignment as a reserve currency.”

In a comment on Twitter, Fred Hickey, creator of the High-Tech Strategist newsletter, said that central bank gold buying is providing solid support for the precious metal as investors continue to avoid the marketplace.

Hickey added that central banks will continue to diversify away from the U.S. dollar as the nation’s debt continues to grow. Hickey pointed out that the U.S. National Debt has increased by $1 trillion since the government passed legislation to lift the debt ceiling early last month.

“U.S. govt. spending is out of control & there’s little doubt that’s a primary catalyst for foreign central bank gold buys,” he said.

While China appears to be leading the way in gold purchases, Gopaul reported over the weekend that other central banks continue to add to their reserves.

He said that the latest data from the central bank of the Republic of Uzbekistan bought eight tonnes of gold last month, its first purchase since February.



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