The People’s Bank of China (PBoC) said Monday it raised reserves for a 7th month running in June, adding 10.3 tonnes, following the inflow of almost 74 tonnes in the 6 months through May.
Last week, Poland said it more than 2X’d its gold assets over this year and last, becoming the Top holder in central Europe.
Gold has rallied to a 6-year highs in Y 2019 as investors bet on rate cuts by the Fed, although robust jobs figures Friday tempered its agressiveness.
Gold purchases by central banks are adding to overall demand, with Russia a strong and continuing buyer of the traditional safe haven metal
“Aside from its attempt to diversify its holdings of dollars, owning more gold reserves is also an important strategy in China’s rise as a superpower,” Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore, said in his e-Mail. Additions are likely to continue he wrote.
In Y 2018, central banks bought 651.5 tonnes, + 74% on the prior year, the World Gold Council (WGC) said in January. Official sector purchases could reach 700 tonnes this year, assuming China continues and Russia at just matches Y 2018 volumes of about 275 tonnes, a Citigroup analyst wrote to clients in April.
China’s recent gold accumulation, and that of other central banks, has come against a backdrop rising prices.
Spot gold traded 0.5% higher at $1,406.90 oz Monday after a 9.1% rally in Q-2.
HeffX-LTN’s overall technical outlook for the world’s largest gold ETF (GLD) is Bullish to Very Bullish in here.