China increased its gold purchases for the sixth month running in May, taking its total reserves to 1,916 tonnes, while the country’s foreign exchange holdings defied expectations for a fall.
The People’s Bank of China bought 15.6 tonnes of the precious metal last month, according to the central bank.
The country has accumulated 74 tonnes of the precious metal since the end of November, when it initially began ramping up purchases, according to Refinitiv data. The value of its reserves have risen to $79.8bn as US-China trade tensions have rumbled on.
Jeremy Lawson, chief economist at Aberdeen Standard Investments, said that gold has not typically served as the same store of value in China as in the US or some emerging markets like India. But he added it would make sense for China to diversify its holdings “if they are preparing for a world of more uncertainty”.
China’s foreign reserves rose to $3.01tn in May, $6bn higher than the previous month, according to the central bank. Economists polled by Reuters had forecast reserves would fall by $5bn.