– China increases gold holdings by large 320,000 ounces
– Gold bullion remains a tiny component of the People’s Bank of
China massive foreign exchange (FX) reserves which rose to $3.073
trillion
– China’s gold reserves rose for first time since October
2016 to 59.56 million ounces by the end of December (1,853 metric tons)
from 59.24 million ounces
– Gold climbed 5% in December on equity rout, growth concerns
After a hiatus of more than two years, China is adding to its gold
reserves again.
The People’s Bank of China increased
holdings to 59.56 million ounces by the end of December, or about 1,853
metric tons, from 59.24 million ounces previously, according to data on the
central bank’s website. They had been unchanged since about 130,000 ounces
were added in October 2016.
The world’s biggest producer and consumer boosted holdings of bullion in a
month marked by mounting concerns that China’s trade dispute with the U.S. is
threatening economic growth. Spot gold had its strongest month in almost two
years as those fears spurred gyrations in equities and the dollar and boosted
demand for the precious metal as a haven.
Speculation that the Federal Reserve may pause its interest rate hikes has
given further strength to gold’s rally into the new year and assets in
bullion-backed exchange-traded funds are at a seven-month high. Spot gold was
trading 0.5 percent higher at $1,291.83 an ounce.
“It’s a bullish sign for gold,” Matthew Turner, a commodities strategist
at Macquarie Group Ltd. in London, said by phone. “The reasons could be
diversification, a wish to get away from the dollar, but it’s hard to be
certain because we just don’t know enough about what their motivations are.”
The Asian nation has previously spent long periods
without revealing increases in gold holdings. When the central bank
announced a 57 percent jump in reserves to 53.3 million ounces in July 2015,
it was the first update in six years.
“I’m always wary of year-end moves, but if they buy again, then it’ll look
like they’re on another run of additions, like they did in 2015-2016.” Turner
said.
It’s not just China buying. Poland and Hungary surprised the market in
2018 by adding to their gold holdings for the first time in many years.
Central banks were expected to increase their purchases of gold
in 2018 for the first time in five years as eastern European and Asian
countries seek to diversify their reserves, according to an October
projection by consultancy Metals Focus Ltd.
News and Commentary
Source: Bloomberg
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Gold Prices (LBMA PM)
04 Jan: USD 1,290.35, GBP 1,016.80 & EUR 1,131.24 per ounce
03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce
02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce
31 Dec: USD 1,281.65, GBP 1,005.45 & EUR 1,120.03 per ounce
28 Dec: USD 1,277.25, GBP 1,009.16 & EUR 1,114.91 per ounce
27 Dec: USD 1,271.10, GBP 1,006.20 & EUR 1,115.26 per ounce
24 Dec: USD 1,261.25, GBP 996.26 & EUR 1,105.23 per ounce
Silver Prices (LBMA)
04 Jan: USD 15.70, GBP 12.40 & EUR 13.76 per ounce
03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce
02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce
31 Dec: USD 15.47, GBP 12.11 & EUR 13.51 per ounce
28 Dec: USD 15.30, GBP 12.05 & EUR 13.34 per ounce
27 Dec: USD 15.06, GBP 11.92 & EUR 13.22 per ounce
24 Dec: USD 14.68, GBP 11.60 & EUR 12.88 per ounce
