China’s central bank buys more gold as prices hit record

China’s central bank expanded its gold reserves for a third month in January, even as the precious metal kept rallying to a record high.

Bullion held by the People’s Bank of China rose by 0.16 million troy ounces last month, according to data released Friday. The central bank resumed adding gold reserves in November after a six-month halt that followed an 18-month buying spree.

The move shows the PBOC’s commitment to diversify reserves even with gold at historically high levels, and it joins a slew of other central banks adding gold to their holdings amid geopolitical and economic uncertainties. The precious metal has set successive records this week, supported by haven demand.

“The PBOC will likely continue to diversify its reserves in the longer term, given the rising geopolitical uncertainty,” said David Qu, an economist at Bloomberg Economics. Politics may be the key reason behind the move as the central bank resumed buying after Donald Trump was elected, he said.

Buying gold for jewelry buying remains subdued in China due to tepid economic growth.

(By Yihui Xie)

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