China Is Buying More and More Gold as the Trade War Drags On(Source Bloomberg)
China extended its gold-buying spree, adding to reserves for a sixth straight month, as the protracted trade war with the U.S. hurts growth expectations and boosts demand for a portfolio diversifier.
The People’s Bank of China increased its bullion reserves to 61.61 million ounces in May from 61.10 million a month earlier, according to data released on Monday. In tonnage terms that’s a rise of 15.86 tons, after almost 58 tons of gold were added to the nation’s stockpile in the five months to April.
The rise reflects the government’s “determined diversification” away from dollar assets, Argonaut Securities (Asia) Ltd. analyst Helen Lau said, adding that retail demand has also picked up. At this rate of accumulation, China could buy 150 tons in 2019, according to Lau.