(Kitco News) – The People’s Bank of China (PBoC) added to its bullion reserves for the 18th consecutive month, but April was the second consecutive month of dramatic volume declines, leading to record high prices. suggests that it may finally be updated. Exacerbating central bank gold worries.
The amount of gold purchased by the People’s Bank of China last month was 60,000 troy ounces, far lower than the 160,000 ounces it bought in March and less than the 390,000 ounces it bought in February. March’s amount was the smallest since the central bank began its record purchases in November 2022, and April’s amount was 63% lower.
Market participants speculated that February’s lower numbers may have been affected by the Lunar New Year holiday, when markets were closed from February 10 to 17 and most business activities were suspended. However, the March figures confirmed the downward trend in Chinese sovereign purchases and the decline in April. was even more dramatic.
Still, many experts believe that the past 18 months represent a fundamental shift in the gold market from the West to the East, and especially to China, and they do not expect that general trend to reverse any time soon. I didn’t expect it.
Central bank purchases have been a major driver of the rise in gold prices since Russia’s invasion of Ukraine in 2022, with China leading sovereign purchases during this period.
The World Gold Council noted that central banks purchased more gold in the first quarter of 2024 than in any other first quarter on record. “The pace of central bank gold purchases continued in the first quarter,” the WGC said in a new report. Gold Demand Trends Report for Q1 2024. “290 tonnes (net) was added to official holdings, but only a portion of it is currently reflected in IMF data.”
China’s consumer market also shows strong demand for gold, even as prices hit new highs. According to the China Gold Association According to (CGA), the country’s gold consumption in the first quarter of 2024 was 5.94% higher than the same period in 2023, which is believed to be due to a surge in public demand for safe assets. Masu.
Chinese buyers bought 308.91 tonnes of precious metals in the first three months of this year. According to CGA, demand for gold bars and coins increased by 26.77% to 106.32 tonnes in the first quarter, with gold bars and coins accounting for 34% of the total.
But while the soaring price of gold has made the yellow metal more attractive to Chinese investors, it has also made it too expensive for many casual shoppers. Purchases of gold jewelry during the quarter decreased by 3% to 183.92 tonnes, accounting for 59.5% of total consumption. CGA stated that the rise in gold prices has increased business risks for precious metal processing and sales companies.
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