China has stocked up considerably on gold since it resumed buying it in December, boosting its reserves with over 190,000 ounces (over 100 tons), according to data from the People's Bank of China, as cited by Xinhua.
Beijing raised its gold stock to the benchmark of 62.64 million ounces in September, which showed a marked upward trend as compared to the 62.45 million registered back in August.
The country's gold reserves hit their highest in more than six years in September, as the trade war and rate cuts boosted investors’ interest in non-dollar currencies and alternative ways of storing wealth.
Central banks in emerging markets also switched on their appetite for bullion, and considering China's protectionist policies and geopolitical wariness, gold bullion is expected to further rise:
“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 Singapore-based Oversea-Chinese Banking Corp. “As China becomes a superpower in its own right, I expect more gold-buying”.
The rise in bullion investments is occurring against the backdrop of a lukewarm trade war that has seen the US and China exchange multiple rounds of mutual tariffs on imports.
Despite high-profile negotiations being set to continue in Washington this week, Chinese officials have indicated their increasing reluctance to agree to a broad deal.
China is not the only country to have been boosting its gold bullion as of late in a bid to lessen its economy’s reliance on the US dollar: over the first half of the year, international central banks bought 374.1 tons, thereby driving total demand for the precious metal to a three-year-high, according to the World Gold Council.
More specifically, per data released by the Central Bank of Russia in September, Moscow augmented its stockpile of gold by more than $7.5 billion in one month.
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.
Its reserves are comparable in volume to those of Italy (2,451.8 tons) and France (2,436.1 tons), according to the World Gold Council.