PBoC: Gold reserves at end-May 73.83 million ounces, up 60,000 ounces month-on-month, marking seventh consecutive month of purchases.

PBoC: Gold reserves at end-May 73.83 million ounces, up 60,000 ounces month-on-month, marking seventh consecutive month of purchases.

The People's Bank of China (PBoC) reported that its gold reserves stood at 73.83 million ounces at the end of May 2025, marking the seventh consecutive month of purchases. This significant increase of 60,000 ounces month-on-month underscores the central bank's growing confidence in the precious metal as a safe-haven asset [1].

Gold prices have been volatile in recent months, with predictions suggesting a potential decline of 12-15% over the next two months. This fall is attributed to an increase in supply and a shift in investor sentiment [1]. Despite these predictions, the PBoC's continued accumulation of gold highlights its long-term view on the metal's importance in the global economic landscape.

The PBoC's actions align with the broader trends seen in global gold markets. Quant Mutual Fund has predicted that gold prices might fall by 12-15% in the coming months, with current prices at Rs 98,500 per 10 grams in Delhi [1]. The fund also reiterates the importance of maintaining a meaningful percentage of one's portfolio in precious metals.

Meanwhile, geopolitical and economic uncertainties continue to drive investor interest in gold. The escalating tensions in the Russia-Ukraine conflict and the ongoing trade tensions between the United States and China have bolstered demand for gold as a safe-haven asset [1]. This demand is likely to persist, supported by the PBoC's continued purchases and the broader economic climate.

In the international market, spot gold was up 0.3% at $3,361.73 an ounce, while US gold futures firmed 0.3% to $3,385.80 [1]. The focus remains on Friday’s US non-farm payrolls data for more cues on the Federal Reserve’s policy path, which could influence gold prices.

The PBoC's actions underscore the strategic importance of gold in its reserves. As global economic uncertainty persists, the central bank's continued purchases signal a long-term view on the metal's value. Investors should closely monitor these developments, as they may provide insights into future market trends and policy directions.

References:

[1] Haris, M. (2025, June 4). Gold Prices May Fall Below Rs 85,000 In 2 Months: What's Behind The Big Decline? News18.com. Retrieved from https://www.news18.com/business/gold-prices-may-fall-below-rs-85000-in-2-months-whats-behind-the-big-decline-ws-l-9368485.html