🇨🇳 China’s share of gold as a percentage of its total reserves
Gold prices set a new record high on Monday, topping $2,300 per ounce amid a broad commodities rally, international tensions and moves by global central banks.
Why it matters: Central bank purchases have been key in driving up gold, which normally operates as a safe haven in times of turmoil.
- Conflict in the Middle East, as well as speculation that the Federal Reserve may loosen monetary policy later this year, is also helping give bullion a lift.
- The metal neared $2,400 per ounce before paring gains, but was still up over half a percent on the day, according to Yahoo Finance data.
Context: The metal’s rarity and physical properties give it its inherent value besides being a shiny, coveted metal. Bullion is also used by investors a hedge against market and global risk (it’s part of the reason Costco started selling gold bars last year).
- According to Bank of America data, China, Poland and Singapore led the central bank gold purchases in 2023; The world’s second-largest economy has led the pack, stockpiling gold for the 17th straight month.
By the numbers:Â Bullion still makes up a large portion of global central bank reserves.
- U.S. leads the world’s official bullion holdings, with 69.7% of reserves which is 8,133 tons as of February 2024.
- But in 2023, China outpaced all central banks, adding 225 tons of gold to its reserves. That was the highest increase since 1977, with total gold reserves reaching 2,235 tons by the end of December last year.
- As of February 2024, gold accounts reached 4.3% of China’s official foreign exchange reserves from 2.9% in 2019.
Zoom in: The People’s Bank of China (PBOC), has been steadily beefing up its gold reserves for more than a year.
- China’s gold spree isn’t just about financial strategy—it’s also in reaction to rising geopolitical woes.