The Chinese Central Bank (PBOC) has been hesitant to continue buying gold due to rising world prices this year. Despite not increasing its gold reserves in May, which ended an 18-month streak of purchases, the value of China’s gold reserves at the end of May was $170.96 billion USD.
Last year, the PBOC was the largest buyer of gold with net purchases of 7.23 million ounces. However, with prices hitting new peaks in recent months, the bank may be hesitant to continue purchasing gold at record high prices.
The global central banks’ demand for gold has been increasing over the past two years due to its safety, high liquidity, and profitability. Central banks purchased a record amount of gold in the first quarter of this year, with China, Turkey, and India among the leading buyers. Despite the recent drop in gold prices, the long-term outlook for gold prices remains positive.
Overall, while the Chinese Central Bank has paused its gold buying activities, global central banks continue to see the value of gold as an important asset in their reserves.