China's gold reserves rose by 5.9 tons in September, bringing the total added since December 2018 to over 100 tons, Bloomberg reported, citing the People's Bank of China. The price is back above the psychological $1,500's and sights are set for higher levels as we head over to trade talk territories.
Gold prices eased on Monday as the dollar firmed after a report said China was reluctant to agree to a broad trade deal with Washington, but bullion held a tight range as investors took a wait-and-see approach ahead of US-China talks this week.
"Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function", said Howie Lee, an economist at OCBC Bank. The US yesterday added 28 Chinese organizations to its blacklist - blocking these companies from buying US goods - over concerns that China is violating the human rights of Muslim minorities in Xinjiang.
The next round of U.S-China trade talks are set to be held in Washington on October 10-11, although hopes of progress diminished after a report that Chinese officials wanted the scope of this week's negotiations to be narrow.
Spot gold declined 0.35 percent to $1,499.36 per ounce, after having risen half a percent last week on growth worries. While prices fell 3.2 per cent in September, they are still up 17 per cent this year.
Russia's bullion holdings accounted for around 2,217.68 tons by late July, after racking up another nine tons of the precious metal in just one month, so that since the start of the year, the country's central bank has boosted its gold holdings by a total of 106 tons. The PBOC data were released at the weekend.
Russian Federation and China have been consistently stockpiling gold bullion in recent years to shift their growing worldwide reserves away from the United States dollar.
Beijing has long picked a path of cashing in on investor demand for gold and national currencies as trade controversies with the U.S. persist, scaling new record highs in the past six years.
While a 10th straight month of accumulation marks a steady buying pattern for the PBOC, China has in the past gone for long periods without disclosing moves in gold holdings.