10 Jul 2019
China’s central bank, the People's Bank of China (PBOC) has, for the 7th consecutive month, increased its gold reserves. This is being done so for the country to have a wider variety of financial assets.
Amid a trade war between China and the U.S., as well as a number of disputes between other nations, the PBOC increased its reserves by 10.3 tons of gold this month, adding them to the 74 tons reserved in the previous months.
Economists believe that China’s motive is to make sure that it has the financial means in case of emergencies in the future, and also works as a way to not depend on the American dollar. If the feud between the countries does not end or improve, economists predict that China will continue purchasing gold on a monthly basis.
It seems to be a trend at the moment for banks to be buying more gold, adding it to the stock, as Poland doubled its gold purchases throughout the past two year. This led to the price of gold to increase due to a larger demand.
In addition, last year’s amount of gold bought, 651.5 tons, is set to be exceeded. This year’s amount bought will go beyond it, if China continues its monthly purchases and if Russia repeats last year’s purchase of 275 tons.