For the sixth consecutive month, China increased its gold holdings, continuing a wave of purchases as central banks around the world increase their gold holdings in response to rising geopolitical and economic threats.
In April 2023, China increased its gold holdings by around 8.09 tons, according to figures released on Sunday by the State Administration of Foreign Exchange. After the country expanded reserves by roughly 120 tons in the five months leading up to March 2023, total stockpiles now stand at about 2,076 tons.
In the past year, central banks have bought a lot of gold to diversify their holdings and shield their reserves from the effects of rising inflation and a declining dollar. According to the World Gold Council, volumes were still at historically high levels even though inflows slowed down in the first quarter of 2023. Among the top buyers were Singapore, China, and Turkey.
As markets worry about a faltering US economy and indications of ongoing financial stress, the voracious appetite for gold has propelled prices to almost record highs. The geopolitical dangers brought on by the deteriorating Sino-American relations are also enhancing bullion’s allure as a safe haven.
After a 10-month run that concluded in September 2019, China just underwent a buying spree that started in November. The previous round of inflows ceased in late 2016 before that.
China’s foreign exchange reserves ended April at $3.2048 trillion, up $20.9 billion from the previous month, according to the report. According to a statement from the foreign currency regulator, the increase in foreign exchange reserves was brought on by the devaluation of the US dollar and an increase in the values of global financial assets. According to this, China’s economic recovery will aid in the reserves remaining largely constant.