The People’s Bank of China (China’s central bank) announced on Saturday (June 7) official data showing that the central bank continued to buy gold in May, marking the seventh consecutive month of increasing gold reserves.
According to the data released on Saturday, the People’s Bank of China added 60,000 troy ounces of gold reserves in May, increasing the total reserves from 73.77 million troy ounces at the end of April to 73.83 million troy ounces at the end of May.
Gold is often seen as a safe haven for hedging economic and geopolitical uncertainties, and after hitting a historical high of $3,500 per ounce in April, the spot price remained relatively stable in May.
As of the end of May, the corresponding U.S. dollar value of the People’s Bank of China’s gold reserves decreased from $243.59 billion at the end of April to $241.99 billion at the end of May, a decrease of $1.6 billion, according to the data from the People’s Bank of China.
Amid tense global geopolitical situations and the ongoing U.S.-China trade war, gold has emerged as the best-performing major commodity this year. For the Chinese, concerns about the devaluation of the yuan have been heightened due to the tariff war.
After a significant 27% increase in gold prices in 2024, they have surged another 27% so far this year.
Officials from the People’s Bank of China have not publicly explained the reasons for purchasing gold. In 2024, after a frenzy of gold purchases lasting 18 months, the central bank paused for six months until resuming gold purchases only after Donald Trump won the U.S. presidential election in November last year.
Consultancy firm “Metals Focus” stated this week that central banks around the world are expected to purchase 1,000 metric tons of gold in 2025, marking the fourth year of large-scale purchases as they diversify reserves from dollar-denominated assets to gold bars.