China’s treasure hunt appears to be far from over. The appetite for gold remains particularly strong, with the People's Bank of China adding bullion to its reserves for the 17th straight month in March.
This helped power gold to records. The precious metal extended its bullish run fueled by optimism that the US Federal Reserve was nearing a long-awaited shift toward cutting interest rates.
According to Bloomberg, China’s central bank now holds an impressive 72.58 million troy ounces of gold, a level last seen in November 2015.
Increased demand for gold from central banks, including China and India, has been one of the key driving forces behind the asset’s rally since 2022. Data from the World Gold Council showed that global central bank gold reserves continued to rise in February 2024, marking the ninth consecutive month of growth.
Meanwhile, China’s foreign exchange reserves reached their highest level since December 2021, standing at $3.2457 trillion as of the end of March 2024. The reserve assets rose by 0.6% from February and 1.9% from a year ago, which the People's Bank of China attributed to the need to maintain stable financial holdings to weather risks.
According to analysts, the bullion binge comes as part of China’s efforts to seek refuge in precious metals amid fears of geopolitical turmoil and inflation jitters. In addition, the country's gold-buying spree could help Beijing evade potential Western sanctions.
