The new record price for gold does not stop Chinese citizens and the government from buying the metal. The People’s Bank of China has been purchasing for 17 consecutive months, which is the longest buying streak in history. In 2022, China bought 218 tons, and last year – 279 tons. Meanwhile, another major gold consumer, India, has reduced purchases by 9%, yielding the top spot to China. The main reasons for such acquisition rates of physical gold include the desire to reduce the share of the dollar in reserves and to hedge the yuan against devaluation.
Investors and the consumer sector are not lagging behind the People’s Bank. For wealthy Chinese and companies, gold is a reliable way to preserve their assets. Trading volumes of gold on Chinese exchanges have risen to five-year highs. Gold imports increased by 34% ahead of the Lunar New Year in China, the peak gift-giving season.
Such strong support for the growing market is positively assessed by both speculators and metal producers.