China’s Central Bank extends gold-buying as metal’s rally cools

Bullion held by the People’s Bank of China rose by 30,000 troy ounces last month, bringing the total to around 74.12 million troy ounces. The current buying cycle began in November 2024.

Gold has consolidated above the $4,000-an-ounce mark after pulling back from a peak in October and remains on track for its best year since 1979. Rising expectations that the Federal Reserve will cut borrowing rates at its December 9-10 meeting are supporting the metal, while the market is also expecting the next Fed chair to take a more dovish approach to monetary policy.

Central-bank purchases worldwide ramped up in October after a lull in the middle of the year, according to the World Gold Council. Official-sector buying that allows countries to hedge against the dollar, began to expand in the aftermath of Russia’s invasion of Ukraine and the freezing of Moscow’s foreign reserve assets. The PBOC is also courting foreign central banks with offers to store their gold in China. It has so far attracted a few takers, including Cambodia.