China has been adding gold to reserves for six months

China added gold to its reserves in May for the sixth month in a row added. Figures from the central bank show that the country bought 15.86 tonnes of gold last month, increasing its total gold reserves to more than 1,916 tonnes. The central bank's total reserves rose to $3.2 trillion in May, of which $79.83 billion was in the form of precious metals. This means that the central bank holds about 2.5% of its reserves in the yellow metal.

China's central bank started buying gold again in November after nearly two years of inactivity. Since then, the country has added a total of 74 tonnes to its reserve, similar to all purchases made by Russia in the same period. We don't know why China is suddenly buying so much precious metal, but it is quite conceivable that the trade conflict with the United States plays a role. By buying gold, the central bank is sending the signal that it is looking for more diversification in alternatives to the dollar. The precious metal has no counterparty risk and can be used to make payments under any circumstances.

China continues to accumulate gold

The Chinese central bank has gradually expanded its gold reserves over the past twenty years. At the beginning of this century, the country had less gold than the Netherlands, but now it has almost three times as much as the Dutch Central Bank. The graph below shows the development of the gold stock, both in weight and in market value. It is striking that the gold supply is increasing step by step. That's because the central bank has only been publishing monthly figures since the summer of 2015. That was a requirement of the IMF to include the yuan in the SDR's currency basket.

It's not just China's central bank that is actively engaged in Buy gold. Chinese consumers and investors are also buying a lot of precious metals. The country has been the largest market for precious metals for a number of years now, followed by India. Despite the fact that China has the largest gold mining sector, the country is also the largest importer of the precious metal today.

China adds gold to reserves again in May