Slip of thegold which at 1pm was losing 1.6% to 2,352 dollars an ounce. The decline materialized as soon as the news came out that the Central Bank of China in May it didn’t buy an ounce of the precious metal after 18 consecutive months of massive purchases. A figure that pushed gold to a new all-time record of $2,450 an ounce on May 20th.
The reasons for the stop on purchases
The Chinese Central Bank did not explain the reasons for this stop. We can therefore only make hypotheses in this regard: the first is that Beijing will judge Too high current price levels. Already in April, purchases had suffered a slowdown, falling to 60,000 ounces from 160,000 in March and 390,000 in February. And again in April, gold imports decreased by 30% compared to the previous month.
Also note that China uses foreign currency reserves to buy gold, thus reducing its exposure to dollar and other foreign currencies. It may therefore be that the Chinese Central Bank has achieved its current objectives of reducing exposure to the dollar. (All rights reserved)
Posting time: 06/07/2024 12:50
Last update: 06/07/2024 1.20pm
