Gold slipped after the biggest weekly advance in three months, with central-bank purchasing patterns in focus.
Bullion traded near US$2,380 an ounce after rallying by almost 3 percent last week, and while the People’s Bank of China (PBOC) did not add gold to its reserves for a second month last month, a report from India suggested the nation’s central bank probably increased its bullion reserves by the most in almost two years.
“Some pullback in gold prices” should not be ruled out following the PBOC data, Oversea-Chinese Banking Corp foreign-exchange strategist Christopher Wong (黃經隆) said. “But it is not uncommon for China to temporarily halt purchases, given that gold prices have rallied quite sharply.”
Photo: Bloomberg
Gold has soared this year — hitting a record in May — as central-bank buying lifted prices, with policymakers in countries including India, China and Singapore seeking to diversify reserves.
The precious metal has also been supported by bets the US Federal Reserve would start to cut interest rates as inflation cools, as well as geopolitical tensions.
Bullion held by the PBOC was unchanged at 72.8 million troy ounces at the end of last month, figures released on Sunday showed.
The central bank opted not to add to reserves in May, ending an 18-month buying spree.
The Reserve Bank of India added more than nine tonnes last month, based on calculations using weekly data, World Gold Council analyst Krishan Gopaul said.
That is the most since July 2022, and means India’s reserves have expanded by 37 tonnes this year to 841 tonnes, he wrote in a social media post.
Spot gold declined as much as 0.5 percent to US$2,380.80 an ounce in Singapore hours, and traded at US$2,382.65 at 2:26pm in Singapore.
It is possible that soaring gold prices have deterred purchases by the PBOC, Saxo Capital Markets Pte strategist Charu Chanana said in Singapore.
Still, there is further upside for gold amid increasing hopes for looser monetary policy this year, as well as ongoing geopolitical risks, she said.
In the coming days, gold traders would assess two days’ of US congressional testimony from US Federal Reserve Chairman Jerome Powell today and tomorrow for hints about the outlook for US rates into the end of this year, as well as consumer price index data for last month on Thursday.
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