China’s Central Bank Anticipated to Resume Gold Purchases as Prices Fall

According to a recent report, industry experts anticipate that China will continue to purchase gold once prices stabilize from their record highs in May.

Data revealed last week indicated that China’s gold holdings remained unchanged in May, leading to a significant decline in gold prices, which fell by over 3% during Friday’s session and dipped below the $2,300 mark.

As the largest official buyer of gold, China has consistently added to its gold reserves for 18 consecutive months.

David Tait, CEO of the World Gold Council, shared his perspective on China’s gold purchasing strategy, noting that, although there has been a pause in activity, the country is carefully monitoring the market. He suggested that should prices drop to around $2,200 per ounce, China is likely to resume its buying.

As of early Tuesday morning, gold was trading at $2,306.

The precious metal reached a peak of nearly $2,450 on May 20, fueled by expectations of a potential interest rate cut by the Federal Reserve, ongoing geopolitical tensions, and increased purchases by central banks.

In 2023, China has emerged as the largest official sector buyer of gold, with net purchases totaling 7.23 million ounces, equivalent to 224.9 metric tons, according to the World Gold Council. Additionally, a survey conducted by the Official Monetary and Financial Institutions Forum indicated that central banks are likely to continue expanding their gold holdings over the next 12 to 24 months.