World Gold Council says diversification driving China’s growing reserves
China’s gold reserves have grown for 18 straight months, country’s central bank says
China is expected to keep adding to its gold reserves as central banks in emerging markets turn to the precious metal to diversify their reserve assets, the World Gold Council said.
“We expect central banks, including China’s, to continue increasing gold holdings, though the pace may vary,” Joe Cavatoni, the council’s senior market strategist and head of public policy, said this week.
China’s gold reserves stood at 74.64 million troy ounces (2,322kg) at the end of last month, up 260,000 troy ounces from March, according to the People’s Bank of China, marking the 18th straight month of increases.
By comparison, the US holds 261.48 million troy ounces in its reserves, the world’s largest, which have remained unchanged in recent quarters, according to figures from the US Treasury and US Federal Reserve.
Gold demand was being supported by structural concerns over rising debt levels in developed economies and the continued erosion of fiat currencies’ purchasing power, Cavatoni said on Wednesday. Turkey offered one example, he added, as the country was tapping its gold reserves to help manage its current-account deficit and support the value of its currency.
Chinese retail and institutional investors have also driven strong global demand for gold exchange-traded funds (ETFs) this year.