Gold prices have been on the rise due to geopolitical tensions, but China’s central bank has stopped buying gold after reaching all-time highs. In May, China’s gold holdings remained unchanged, ending an 18-month streak of purchases. The People’s Bank of China had been consistently buying gold for 18 months before pausing in May. The current benchmark spot gold price is $2,300 per ounce, which is 6% lower than its record high in May. Despite being considered a safe-haven asset, the upward trend in gold prices may lead to decreased demand from Chinese individuals who have been stocking up on gold as a hedge against economic uncertainties and a weakening yuan. If prices correct to around $2,200 per ounce, China may resume buying gold again.
