China has been adding gold to reserves for seven months

China has increased its gold reserves for the seventh consecutive month Increased. According to data from the People's Bank of China, China increased its national gold reserves by 16 tonnes in May. The total gold reserves now amount to about 2,092 tonnes, more than four times as much as at the beginning of this century. Over the past seven months, the country added a total of 144 tonnes of the precious metal to its stockpile. This makes China one of the biggest buyers of gold at the moment, after a period of inactivity between 2017 and 2019 and between 2020 and 2022. Only Singapore was a bigger buyer than China in the first quarter of this year.

Central banks bought a Record amount of gold, as they see the precious metal as a safe haven amid rising geopolitical uncertainty and persistent global inflation. Although purchases fell back to lower levels in the first quarter, gold experts expect purchases to remain robust. Central banks accounted for nearly a quarter of global demand for the precious metal last year, and continued purchases would provide some support to prices. At the beginning of May, the Gold price In dollars, it returned to the old record, but then fell back a bit due to a strengthening dollar.

China has more than quadrupled its gold reserves since 2002 (Source: World Gold Council)

Central banks want to buy more gold

About a quarter of central banks plan to increase their gold reserves over the next 12 months, a new World Gold Council survey. The main reason for doing so is growing pessimism about the future role of the U.S. dollar. Gold is also seen as an important instrument to diversify the portfolio. The precious metal has no counterparty risk and has a fairly low correlation with other investments. This makes gold interesting not only for central banks, but also for investment funds, private investors and even savers.

The London Bullion Market Association expects strong central bank demand to continue this year, London Bullion Market Association (LBMA) CEO Ruth Crowell said in an interview with Bloomberg TV earlier this week. High inflation and ongoing geopolitical tensions will bolster the flight to gold as a proven safe haven. The World Gold Council's survey found that a larger percentage of central banks surveyed want to add gold to their reserves this year than last year. Emerging economies and BRICS countries in particular buy more precious metals, because these countries have relatively less official gold reserves than Western countries.