China added to its gold reserves for a 10th straight month, extending a push to bolster its hefty stockpile as it tries to diversify away from the US dollar.
Bullion held by the People’s Bank of China rose by 930,000 troy ounces in August, the central bank said on Thursday. That’s equivalent to about 29 tons. Total reserves now sit at 2,165 tons, with around 217 tons added in a run of purchases that began in November.
Asia’s biggest economy has been among the most enthusiastic buyers of gold in recent times as it focuses on ways to diversify its monetary reserves. The massive purchases have helped underpin prices despite rising interest rates around the world, which typically sap demand for non-interest bearing bullion.
At the same time, the concentration of shipments to China has left the precious metal vulnerable to any potential shift in demand. Central banks elsewhere expected to ease purchases this year following record buying in 2022.
For the moment, Beijing’s appetite for bullion remains persistent. The country’s appetite for gold has been linked with the broader global moves to reduce reliance on the US dollar. President Xi Jinping has strengthened ties with his BRICS nation counterparts, as the bloc strives to conduct more trade between themselves in their own currencies.
The PBOC’s buying spree is the longest since a 10-month run that ended in September 2019. Before that, the last wave of inflows ended in late 2016.
Meanwhile, China’s total foreign currency reserves were $3.1601 trillion by end-August, down by $44.2 billion from end-July, Bloomberg calculations show.
(By Sybilla Gross)