The People’s Bank of China (PBOC) reported an increase in the country’s gold reserves of 18 tons in March, continuing its buying spree. China has consistently added to its gold reserves since November, purchasing more than 100 tons in the last five months. The Asian state now has 2,068 tons in its coffers.
China Purchased 18 Tons of Gold in March, PBOC Reports Show
China further increased the size of its gold reserves in March. According to reports from the People’s Bank of China, the size of the national Chinese gold reserve increased by 18 tons in March, reaching 2,068 tons in total. The purchase marks the continuation of a five-month buying spree that the country executed starting in November last year.
After no reports of gold purchased since 2019, the country has been consistently buying gold, having purchased 102 tons in the aforementioned five-month period. The demand for gold has been strong in 2023, according to the World Gold Council, which believes that central banks will keep hoarding gold this year.
In 2022, the same institution registered record numbers in central bank gold purchases, with central banks acquiring their highest amounts of gold since 1974. The reasons behind this renewed gold rush have to do with the need to seek refuge in safer assets during inflationary times.
According to economists, China might be preparing for the issuance of a gold-backed currency as part of the BRICS strategy to reduce dependence on the U.S. dollar. In October, Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, explained this might be the case given the high quantity of gold purchased by the nation.
More recently, State Duma Deputy Chairman Alexander Babakov stated that such a currency might be presented at the BRICS summit in August, potentially being backed by gold and other commodities.
Gold Price Predictions
The continued demand for gold by central banks and the macroeconomic headwinds that some of the biggest world economies are facing has caused analysts to predict a rise in gold prices in the future.
Jan Nieuwenhuijs, a gold market analyst, has stated that gold prices might touch the $8,000 mark in the next decade, as central banks start shedding foreign currency reserves and run to gold. Also, Peter Schiff, an economist and known gold bug, has predicted the coming of a gold bull market, stating that gold still has legs to keep growing and that this will cause capitulations for Wall Street investors.
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