China Central Bank halts gold purchases
The People’s Bank of China (PBOC) stopped gold purchases after gold prices reached a record.
According to data announced on Friday, the gold reserves held by the Central Bank of China remained unchanged in May at 72.80 million ounces.
The PBOC’s request for gold comes as the world’s second-largest economy seeks to diversify its reserves and hedge against currency depreciation.
Spot gold fell by 1.1 percent after the PBOC data. Gold rose to an all-time high above $2,450 per ounce in May, supported by strong central bank purchasing.
According to the World Gold Council, first-quarter purchases by public institutions around the world were at record levels, with China being the largest buyer. However, since then there have been signs that Chinese demand has decreased due to the negative impact of higher prices.
PBOC purchased 60 thousand ounces in April, compared to 160 thousand ounces in March and 390 thousand ounces in February. Meanwhile, the country’s imports in April decreased by 30 percent compared to the previous month.