China’s Central Bank Pauses Gold Purchases After 18-Month Surge


China’s central bank, the People’s Bank of China (PBOC), has paused its gold accumulation for the second consecutive month, maintaining its reserves at 72.8 million troy ounces. This pause ends an 18-month streak of continuous gold purchases that began in November 2022 and had significantly contributed to record-high gold prices.

In June, the PBOC chose not to increase its gold reserves, as reported by the World Gold Council. The central bank’s bullion holdings stayed steady at 72.8 million troy ounces by the end of the month. Official data show that China’s gold reserves stand at 2,264 tonnes, equivalent to this amount.

Follow us on Google News! ✔️

The halt in gold accumulation actually began in May, breaking an 18-month trend of consistent monthly purchases. Market analysts suggest several possible reasons for this decision. One possibility is that the PBOC might be revising its strategy due to fluctuating global gold prices, which have shown considerable volatility. Additionally, domestic economic factors such as inflation and growth rates might be influencing the bank’s strategy.

Despite the official pause, some analysts speculate that China might still be buying gold discreetly, driven by the current high prices. In a recent interview with Kitco News, Christopher Vecchio, Head of Futures & Forex at Tastylive, pointed out regional data indicating China’s gold purchases in late June. Vecchio also mentioned that while central bank demand remains a supportive factor for gold, it no longer drives the market as it did earlier in the year. Now, the focus has shifted to the Federal Reserve’s monetary policy.

What do you think about China’s decision to pause its gold accumulation?