Oct 10, 2018 (China Knowledge) - The People’s Bank of China (PBoC) has steadily added to its gold reserves over the last few years as it looks to diversify its reserve assets and use gold as a form of currency and value storage.
Gold reserves in China have grown at a steady pace to reach 1,843 tons in the second quarter of this year from 1,054 tons in the first quarter of 2015. Gold demand among Chinese consumers has also grown by 5% in the second quarter to 144.9 tons compared to a year ago.
The recent rise in demand for gold comes as China looks to hedge itself against rising geopolitical tensions with the U.S. The country’s gold market infrastructure has strengthened in recent years as strong economic growth has spurred demand for jewelry and technology.
Last month, one of China’s largest gold miners, Shandong Gold Group, joined the World Gold Council hoping to take on a greater role and better integrate into the global gold market.
Gold prices has dropped about 13% since a peak in January to USD 1189 per ounce due to a strong U.S. dollar and equity markets. However, experts believe that Asian and Chinese investors have begun to position themselves for a potential reversal of US dollar and equity by increasing their gold holdings. They predict gold is expected to trade between USD 1,200 and USD 1,350 at the end of the year.
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