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Chinese Central Bank Refrains from Buying Gold for 2nd Consecutive Month


Sun 07 Jul 2024 | 09:39 PM
Chinese Central Bank
Chinese Central Bank
Nada Mustafa- Walid Farouk

Chinese Central Bank did not purchase any gold bars in June, marking the second consecutive month without purchases, leading to a drop in the precious metal's price from its record high.

According to official data released on Sunday, the amount of bullion held by the People's Bank of China remained unchanged at 72.8 million ounces at the end of last month. The "Chinese Central Bank" chose not to add to its gold reserves in May, ending an 18-month buying spree that had driven gold prices to record highs.

Some analysts still believe that the People's Bank of China will resume purchases as the world's second-largest economy seeks to diversify and protect its reserves from the devaluation of major currencies. According to a report by the World Gold Council, about 20 central banks are still expected to increase their gold holdings next year, driven by rising geopolitical and financial risks.

High gold prices may have deterred purchases, with the precious metal reaching an all-time high of over $2,400 per ounce last May. However, prices have since fallen as investors pulled back from bets on U.S. interest rate cuts this year. When the People's Bank of China announced data indicating a halt in purchases in May, gold suffered its biggest daily drop in nearly three years.