China Takes a Break from Gold Purchases, But Demand for the Precious Metal Continues

Due to rising world prices, the Chinese Central Bank has slowed down its gold purchases this year. After 18 consecutive months of buying, the Central Bank of China did not acquire any more gold in May. Despite this, the country’s total gold reserves remain at 2,264 tons, with their value increasing to 170.96 billion USD at the end of May.

In 2023, the PBOC was once again the central bank that bought the most gold, with net purchases of 7.23 million ounces. However, the increase in prices caused a hesitation in demand from the Central Bank of China, which led to a decrease in gold purchases by the agency. This had an impact on the global spot gold price, which dropped more than 80 USD on June 7.

Central banks worldwide have been increasing their demand for gold as it provides safety, high liquidity, and profitability. In fact, in the first quarter of this year alone, central banks purchased a record amount of gold. Turkey was among those leading countries in gold acquisitions along with China and India. Despite this short-term adjustment in gold prices due to rising world prices, experts predict that there will be long-term increases in price for gold as it remains a valuable asset for investors and central banks alike.