Gold Slump Continues as China Pauses Buying
Central Bank Stays on Sidelines for Third Straight Month
PBOC's Silence Raises Questions About Appetite for Precious Metal
China's central bank has refrained from purchasing gold for a third consecutive month, as the precious metal continues to endure a downward trend.
The People's Bank of China (PBOC) has not added to its gold reserves since May, leading to speculation about its stance on the asset class. Previously, China was a significant buyer of gold, boosting its holdings to become the world's sixth-largest official gold owner.
The pause in buying has coincided with a drop in the gold price, with spot gold currently trading below $1,750 per ounce. The decline has been attributed to rising U.S. interest rates, which have increased the appeal of holding dollar-denominated assets.
Analysts suggest that China's decision to pause gold buying may be related to its ongoing economic challenges. The country is grappling with a slowdown in growth, as well as concerns about rising inflation and a weakening currency.
The PBOC's silence on its gold policy has left investors uncertain about its long-term intentions. Some analysts believe that China could resume buying gold once the global economic outlook improves, while others speculate that the central bank may be reducing its reliance on the precious metal.
The continued lack of buying from China, a major player in the gold market, has contributed to the ongoing downward pressure on the price of gold. Investors will be closely monitoring the PBOC's next move to gauge its appetite for the precious metal and its potential impact on the gold market.
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