Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
China’s central bank paused gold purchases to its reserves in May, when spot gold prices hit a record high, after 18 months of consecutive purchases, official data showed on Friday.
Spot gold prices fell after the data and were last down 1.4% at $2,342 per ounce. Safe-haven demand driven by geopolitical and economic uncertainty contributed to a rally in gold from March to May, taking spot prices to a record $2,449.89 per ounce on May 20.
China held 72.80 million troy ounces of gold at the end of May, unchanged from the end of April, the data showed. The value of China’s gold reserves rose to $170.96 billion at the end of May from $167.96 billion at the end-April.
The People’s Bank of China (PBOC) did not immediately reply to a Reuters‘ request for comment.
Demand from global central banks for gold has been elevated for two years, supporting prices. The PBOC was the largest official sector buyer of gold in 2023 with net purchases of 7.23 million ounces, according to the World Gold Council, the most for a single year since at least 1977.
“China is nowhere near done buying gold, but the pause also highlights they are humans, balking at the prospect of paying record prices,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“Overall, gold is still consolidating and the news will likely prolong that phase, but overall the long-term bullish outlook has not changed,” he added.
(By Polina Devitt and Kevin Yao; Editing by David Evans)
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