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Official data on Sunday showed that the People’s Bank of China (PBoC), China’s central bank, didn’t buy any gold to its reserves for a second consecutive month in June, per Bloomberg.  China’s gold reserves were at 72.80 million troy ounces at the end of June, unchanged from the end of May. China’s gold reserves dropped to $169.70 billion from $170.96 billion, official data showed.   Market reaction At the press time, Gold price (XAU/USD) is down 0.21% on the day to trade at $2,386.  Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in…

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Filed under: News - @ July 8, 2024 1:22 am