• Mon. Jun 24th, 2024

China Halts Gold Purchases Amid Rising Prices, Sending Shockwaves through the Market

BySamantha Jones

Jun 11, 2024
China’s Central Bank Halts Gold Purchases Due to Price Increase

The People’s Bank of China (PBOC) has decided to halt its gold purchases due to the rising price of the precious metal, according to official data released on Friday. This decision by the central bank has made gold vulnerable to further declines in value, as stated by Ewa Manthey, a commodities strategist at ING Bank.

Currently, the spot gold price is approximately $2,300 per ounce, which is 6% lower than the record high of nearly $2,450 per ounce on May 20. Despite the significant increase in gold prices this year due to global geopolitical tensions, the PBOC’s decision not to buy gold has had an impact on demand. People in China have been purchasing gold as a hedge against economic uncertainties and a weak Chinese yuan, contributing to the surge in gold prices.

In April, the PBOC’s gold purchases began to slow down, with only 60,000 troy ounces bought compared to 160,000 ounces in March and 390,000 ounces in February. This marked a pause in the central bank’s gold buying streak that had lasted for 18 consecutive months during which time it became known as the world’s largest institutional gold buyer. In total for 2023, China purchased more than any other country with its central bank purchasing over two hundred thousand tons of gold.

David Tait, CEO of World Gold Council stated that China is currently monitoring market conditions and waiting for potential correction of prices around $2,200 per once before resuming its purchase again. This suggests that while there may be a break from buying now it may not be permanent and could resume depending on market conditions.

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

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