China Accelerates Gold Purchases Amid Global Price Decline

China's central bank has continued its streak of gold purchases, adding around 15 tonnes in June. This marks its largest monthly purchase since nearly three years ago and is part of a 20th consecutive month of buying. The move comes as the global gold price fell by over 11% in June, posting its worst month since the 2008 financial crisis.

Despite this decline, China's central bank has continued to buy gold every month since the spring. Analysts attribute this divergence from Western investors to a broader push by sovereign buyers to diversify their reserves away from the U.S. dollar. However, no official policy tying these purchases to a gold-backed currency has been announced.

Chinese mining companies have also expanded into Africa's gold sector over the past year. Zijin Mining agreed to acquire Toronto-listed Allied Gold in January for around $4 billion, targeting producing mines in Mali and Côte d'Ivoire along with a development project in Ethiopia. However, due to regulatory issues, the companies mutually terminated the acquisition agreement on July 29.

Instead of acquiring Allied Gold outright, Zijin took a 9.2% stake in the company for roughly $295 million through a private placement. A subsidiary of Chinese defense contractor Norinco has also raised its stake in a gold project in Sudan. The report highlights Africa as one of the few regions where exploration budgets grew last year.