November 14, 2019, 22:06


Ditching the Dollar: China on Gold-Buying Spree in Shift Away From Greenback

Ditching the Dollar: China on Gold-Buying Spree in Shift Away From Greenback

China’s central bank hadn’t reported an increase in its gold reserves for more than two years before December 2018, when it purchased 9.95 tonnes of the yellow metal.

The People’s Bank of China (PBoC) has boosted its gold reserves, having bought some 32 tonnes of the precious metal in the past three months.

READ MORE: China’s Yuan Could Challenge Dollar as Reserve Currency – BoE Governor

According to the PBoC, it increased its gold reserves by 10 tonnes in February, following the acquisition of 11.8 tonnes in January and 9.95 tonnes in December, thus bringing overall holdings to 1,874 tonnes, or 60.26 million ounces.

Before China went on a gold-buying spree in December as part of the country’s strategy to shift away from the US dollar, the PBoC hadn’t reported an uptick in its holdings for over two years. The official figures persisted from October 2016 and November 2018.

China’s move towards stockpiling comes amid similar efforts by world central banks to move away from the greenback. In January, China had the sixth largest gold reserves in the world, slightly lagging behind Russia. According to the World Gold Council, central banks as a whole bought 651.5 tonnes of the yellow metal last year.

The development comes amid ongoing talks between the United States and China to end a trade war unleashed by Washington that slapped sweeping tariffs on Chinese products and prompted Beijing to retaliate.

READ MORE: ‘US-China Trade Dispute Hurting US Pork Producers’ — Pork Producers Council

As a peace gesture during the negotiations, the US delayed raising the tariffs levied on $200 million in Chinese goods from the existing 10 percent to 25 percent – the move was set to take effect on 1 March. Beijing, in turn, committed to purchasing more US products to cute the trade deficit.

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