China Buys Gold at Record Yields

China's central bank has continued to buy gold despite rising Treasury yields, with the latest data showing that it purchased around 35 tonnes of gold through London's over-the-counter market in July.

The move comes as the Federal Reserve lifted its benchmark rate by a quarter point to 3.75% to 4%, while the 10-year Treasury yield reached its highest level since 2007, at around 5%.

The gold buying has been going on for months, with Goldman Sachs estimating that China purchased over 48 tonnes in May and more than 40 tonnes in June.

While some might see this as a contradictory move, given the rising yields on Treasury bonds, Goldman's economists argue that central banks are not motivated by yield, but rather by the need for protection against sanctions and financial risk.