China has added more than 100 tonnes of gold to its reserves since it resumed buying in December last year, reinforcing its standing as one of the major official accumulators, as central banks stock up on the precious metal.
The People’s Bank of China (PBOC) picked up more gold last month, raising its holdings to 62.64 million ounces from 62.45 million in August, according to data on its Web site.
In tonnage terms, the latest inflow totals 5.9 tonnes and follows the addition of about 99.8 tonnes over the prior nine months.
Bullion hit the highest in more than six years last month as slower growth, trade disputes and rate cuts spurred investor demand. Central banks have been major buyers too, especially in emerging markets.
Official purchases are likely to continue as protectionist policies and geopolitical concerns add to demand, Standard Chartered Bank precious metals analyst Suki Cooper said.
“Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function,” said Howie Lee (李華豪), an economist at Singapore-based Oversea-Chinese Banking Corp (華僑銀行). “As China becomes a superpower in its own right, I expect more gold-buying.”
The PBOC’s run of bullion-buying has come against the challenging backdrop of the trade war with the US and a marked slowdown in growth at home.
While high-level negotiations are set to resume in Washington this week, Chinese officials are signaling they are increasingly reluctant to agree to a broad deal.
Spot gold yesterday rose as much as 0.4 percent to US$1,511.31 an ounce and traded at US$1,505.84 in early London trade. While prices fell 3.2 percent last month, they are still up 17 percent this year.
The PBOC data were released at the weekend.
Along with China, Russia has also been adding substantial quantities of bullion.
In the first six months, central banks worldwide picked up 374.1 tonnes, helping push total gold demand to a three-year high, the World Gold Council has said.
While a 10th straight month of accumulation marks a steady buying pattern for the PBOC, China has in the past gone for long periods without disclosing moves in gold holdings.
When the central bank announced a 57 percent jump in reserves to 53.3 million ounces in mid-2015, that was the first update in six years.
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