China’s central bank, the People’s Bank of China (PBOC), has decided to halt its gold accumulation for the second consecutive month, maintaining its reserves at 72.8 million troy ounces. This break in purchasing ends an 18-month streak of continuous gold acquisitions that commenced in November 2022 and contributed to the surge in gold prices.
The PBOC’s decision to pause its gold accumulation in June, as reported by the World Gold Council, indicates that the bank’s gold holdings remain unchanged at 72.8 million troy ounces, equivalent to 2,264 tonnes. This suggests that the Chinese central bank is not increasing its gold reserves for the time being.
There are several factors that could have influenced the PBOC’s decision to pause its gold accumulation. Market analysts suggest that the bank may be adjusting its strategy due to the fluctuating global gold prices, which have shown significant volatility. Furthermore, domestic economic conditions such as inflation and growth rates might also be impacting the bank’s approach.
Despite the official pause, some analysts speculate that China could still be discreetly purchasing gold, considering the current high prices. Christopher Vecchio, Head of Futures & Forex at Tastylive, pointed out regional data indicating China’s gold purchases in late June during an interview with Kitco News. However, he also noted that central bank demand no longer exerts the same influence on the market as it did earlier in the year, with attention now shifting towards the monetary policy of the Federal Reserve.
What are your thoughts on China’s decision to pause its gold accumulation? Let us know in the comments section below.
