China increases its gold reserves.

China's central bank said the country's gold reserves have increased for 18 consecutive months.

Gold is displayed in the Comptoir national de l'Or store in Paris, France. Photo: Reuters .

According to the World Gold Council, China is expected to continue adding gold to its reserves, as central banks in emerging economies turn to the precious metal to diversify their reserve assets.

“We anticipate central banks, including China, will continue to increase their gold holdings, although the pace of purchases may vary,” said Joe Cavatoni, senior market strategist and head of public policy at the council.

According to the People's Bank of China (PBOC), at the end of last month, the country's gold reserves reached 74.64 million troy ounces (approximately 2,322 kg), an increase of 260,000 ounces compared to March. This marks the 18th consecutive month of increase.

Meanwhile, the U.S. currently holds 261.48 million ounces of troy in its reserves – the largest in the world. This figure has remained unchanged in recent quarters, according to data from the U.S. Treasury Department and the Federal Reserve.

Cavatoni argued that this trend should not be seen as a process of "de-dollarization." According to him, buying more gold is "an opportunity for countries to diversify their reserve assets away from the US dollar, as there are currently not many viable options."

On May 27, he also stated that demand for gold is being supported by structural concerns, such as rising debt levels in developed economies and the weakening purchasing power of fiat currencies.

He cited Türkiye as an example, where the country is using its gold reserves to help manage its current account deficit and stabilize the value of its domestic currency.

Chinese individual and institutional investors have also driven strong global demand for gold ETFs this year.

In the first four months of the year, China led the world in inflows into gold ETFs, attracting approximately $9 billion – more than double the $3.6 billion of India, the second-ranked country.

Switzerland and the UK recorded inflows of $1.9 billion , while the US saw net outflows of $1.3 billion .

Cavatoni argues that this trend reflects the role of gold as a “very powerful diversification tool, especially in markets where real estate or other tangible assets are underperforming.”

He also said that young investors in China are gradually shifting from buying jewelry to investing in gold ETFs, gold bars, and gold coins.

According to him, investors in mainland China and Hong Kong have become a significant force in the global gold market, and the World Gold Council is closely monitoring this trend.

Demand for gold in China remains strong despite the strengthening US dollar and the likelihood that the Fed will keep interest rates stable. Meanwhile, Western investors are reducing their gold purchases as higher interest rates make cash and bonds more attractive.

Source: https://znews.vn/trung-quoc-tang-cuong-du-tru-vang-post1655354.html