China is one of many countries that’s buying gold bullion to place in a reserve. It would make sense for the world’s second-largest economy to acquire more of the yellow metal amid a weakening economy, a crippling trade war, and the prevalence of the geopolitical uncertainty.
According to the People’s Bank of China (PBOC), Beijing increased its bullion reserves from 61.10 million ounces in April to 61.61 million ounces in May.
It is evident that the PBOC wants to diversify its reserves, and transition away from U.S. dollar holdings.
Argonaut Securities (Asia) Ltd. analyst Helen Lau told Bloomberg that China could purchase an additional 150 tons of gold this year.
At the time of this writing, gold prices are trading at $1,332.30 per ounce. Year-to-date, gold is up nearly four percent.
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