China’s central bank stocks up on gold as it seeks to diversify
PBoC adds to reserves for a fifth month as many economies seek to shift from dollar
China’s central bank added gold to its reserves for the fifth month in a row in April, the latest emerging market central bank to stock up on the yellow metal.
The People’s Bank of China said its gold reserves rose to 61.1m ounces last month, an increase of 480,000 ounces from March, and bringing its total gold holdings to about $78.3bn.
Emerging market central banks have become some of the largest buyers in the gold market as they look to diversify their reserves away from the dollar. Last year central banks, led by Russia, bought more gold last year than at any time since America decided to move off the gold standard in 1971, with around $27bn worth of purchases.
In the first quarter of this year central banks purchased a total of about $6bn worth of gold, an increase of 68 per cent compared with the same period a year earlier, according to the World Gold Council.
China’s purchases in April equate to around 15 tonnes of gold. Since it started buying gold in December after a 25-month pause, China has built up its gold holdings by almost 60 tonnes, according to analysts at Commerzbank.
Still, the PBoC’s total gold holdings are less than 3 per cent of its total reserves, according to the international gold institution.
The price of gold, which rose to as much as $1,347 a troy ounce in February, has recently fallen to trade at $1,287 a troy ounce.