GFN – BEIJING: China’s central bank extended its gold-buying streak to 19 months in May, adding roughly 9.9 tonnes to reserves even as bullion logged a third straight monthly decline, underscoring sustained official demand through a broader price retreat.
Bullion held by the People’s Bank of China rose by 320,000 troy ounces last month, according to data released on June 7 and reported by Bloomberg, extending a run of purchases that is the longest since at least 2015, when the central bank began publishing more regular updates on its reserves. The addition came as gold edged lower in May, its third consecutive monthly decline following the record set in late January, with persistent inflation concerns and expectations for higher-for-longer interest rates weighing on the appeal of non-yielding assets.
Total declared holdings now stand near 2,322 tonnes, equivalent to roughly 9% of the country’s foreign reserves, with net gold imports reaching 316 tonnes in the first quarter, up more than threefold from a year earlier, alongside seasonal softness in Shanghai Gold Exchange withdrawals as jewellery demand entered its traditional off-season, according to World Gold Council data.
“Central-bank purchases are likely to be stepped up as geopolitical developments reinforce a push to diversify reserves,” Goldman Sachs Group Inc. said in a note last month, maintaining a year-end price target of $5,400.
The continued accumulation positions official demand as a structural support for the market even as spot prices have retreated from January’s high, consistent with a multiyear pattern of reserve diversification among sovereign buyers and with the parallel strength in Chinese physical imports during the first quarter. The development underscores the People’s Bank of China’s continued prominence within global official gold demand.
