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China added to its gold reserves for a sixth straight month, extending a flurry of purchases as central banks around the world expand their holdings of bullion amid escalating geopolitical and economic risks.
China raised its gold holdings by about 8.09 tons in April, according to data from the State Administration of Foreign Exchange on Sunday. Total stockpiles now sit at about 2,076 tons, after the nation increased reserves by about 120 tons in the five months through March.
Central banks have purchased large amounts of gold in the past year to diversify assets, as well as to protect reserves from the impact of a weakening dollar and rampant inflation. While inflows moderated in the first quarter of 2023, volumes were still at historically elevated levels, according to the World Gold Council. Singapore, China and Turkey were among the biggest buyers.
The voracious appetite for gold has helped prices scale near-record highs as markets fret over a slowing US economy and signs of persistent credit stress. Geopolitical risks stemming from increasingly fragile Sino-American relations are also boosting the safe-haven appeal of bullion.
China’s recent buying spree that began in November is the first since a 10-month run that ended in September 2019. Prior to that, the last wave of inflows ended in late-2016.
Meanwhile, China’s end-April foreign currency reserves rose to $3.2048 trillion, up by $20.9 billion from the month before, the data showed.
Rise in the foreign-exchange reserves was a result of US dollar depreciation and rise in global financial asset prices, the foreign-exchange regulator said in a statement. China’s economic rebound will help the reserves keep basically stable, it said.
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