China’s gold buying break seen as fleeting given its long-term needs

Officials at the People’s Bank of China have never publicly commented on what prompted a resumption in gold buying in November 2022 after a more-than three-year pause. — Reuters

CHINA still has plenty of appetite for official gold purchases despite pausing in May and June, as its bullion holdings remain low as a share of reserves and geopolitical tensions persist, according to a policy insider, industry experts and data.

Beijing’s gold buying, which helped the spot price rally in April and May, is no longer perceived to be immune to price sensitivity, but ongoing geopolitical risks are expected to keep its longer-term programme to diversify exposure from US dollar-denominated assets active.