China has added nearly 100 tonnes of gold to its reserves

SINGAPORE – China has added almost 100 t of gold to its reserves since it resumed buying in December, with the consistent run of accumulation coming amid a rally in prices and the drag of the trade war with Washington.

The People’s Bank of China raised bullion holdings to 62.45-million ounces in August from 62.26-million a month earlier, according to data on its website at the weekend. In tonnage terms, August’s inflow was 5.91 t, following the addition of about 94 t in the previous eight months.

Bullion is near a six-year high as central banks including the Federal Reserve cut interest rates as signs of a slowdown mount amid the US-China trade war. Central-bank purchases have been another key support for prices as authorities from China to Russia accumulate significant quantities of bullion to help diversify their reserves. That buying spree likely to persist in the coming years, according to Australia & New Zealand Banking Group.

Trade war restrictions, in the case of China, or sanctions, as with Russia, give “an incentive for these central banks to diversify", John Sharma, an economist at National Australia Bank, said in an email. “Also, with increasing political and economic uncertainty prevailing, gold provides an ideal hedge, and will therefore be sought after by central banks globally.”

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