Global Central Banks Boost Gold Reserves Amid Geopolitical Risks
Central banks in countries around the world are increasing their gold reserves after the price of gold reached its historical peak and stabilized. China's central bank, the People's Bank of China, has significantly increased its gold holdings, purchasing large quantities until early 2024 when the price of gold was around $2,000 per ounce.
The People's Bank of China held 75.44 million ounces of gold in June, a 480,000-ounce increase from the previous month, the largest jump in about two and a half years. The accelerated purchases are attributed to rising geopolitical risks, global uncertainties, and falling confidence in the dollar.
China's move is seen as part of its strategy to accelerate the de-dollarization process and strengthen the yuan's position. According to Chung Jung-young, a researcher at Korea Investment & Securities, China's gold purchases have accelerated with every price adjustment, and the pace of purchases has increased this year alongside falling gold prices.
Korea's central bank, the Bank of Korea, has also decided to buy gold for the first time in 13 years. The bank plans to set up a cooperative system with producers, Korea Exchange, and Korea Securities Depository to purchase domestically produced gold, which will help secure gold in won without using foreign currency.