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China's central banks extends gold purchases for the 11th month

Official data released by the People's Bank of China on Tuesday showed that China's central banks added gold to their reserves for the 11th consecutive month.

China's gold reserves increased to 74.06 millions fine troy ounces by the end September, from 74.02million ounces in August.

The PBOC reported that the gold reserves of the country were valued at an estimated $283.29 Billion at the end last month. This is up from $253.84 Billion at the end August.

Ross Norman, an independent analyst, said that a strong figure would confirm the notion that China is eager to dedollarize and accelerate their actions in this space.

"Further purchase, even modest purchases, will be viewed domestically as positive in a price sensitive market. This may reduce the large discounts offered by Loco Shanghai. "It will give ETF investors and institutions the confidence that gold prices will continue to rise."

The gold price, which is traditionally seen as a safe haven from economic and political uncertainty, has reached multiple records so far this season due to uncertainty over U.S. Tariffs, geopolitical conflict, the expectation of interest rate reductions, a weaker dollar, and central bank purchases.

On Monday, gold prices rose above $3900 per ounce.

The PBOC halted their 18-month gold buying spree in May 2024. The central bank began buying gold again in November 2024.

The World Gold Council (WGC), in a survey, found that central banks expect their gold reserves as a percentage of their total reserves to rise over the next five year period. However, they anticipate their dollar reserves will be lower. Reporting by Zhang Yan and Qiaoyi Li in Bengaluru, as well as Anushree Mukerjee and Ishaan Aroo from Bengaluru. Editing by Jacqueline Wong, Christian Schmollinger and Jacqueline Wong.

(source: Reuters)