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(Kitco News) – The race for gold accumulation continues as the central bank of the world's second-largest economy added more ounces to its foreign exchange reserves for the fourth consecutive month.
According to the latest statistics from the People's Bank of China, the central bank added 360,000 ounces of gold to its foreign exchange reserves last month. Gold reserves totaled 60.62 million ounces at the end of March.
ING commodity analysts said that since November, China has added 1.38 million ounces to its reserves. "This increase in purchases comes at a time when trade tensions between the United States and China continue to grow," analysts said.
Analysts have noted that the central bank's gold demand is an important support for the yellow metal, which continues to face growing competition from rising stock markets and the strength of the US dollar.
Some analysts also said they did not expect central banks to stop buying gold sooner, as countries reduce their reliance on the US dollar.
"China, and probably other nations, is suspected of diversifying its reserves to no longer rely on the US dollar as a reserve currency," Lawrieongold.com founder Lawrie Williams said recently. "The United States has shown that it is ready to use the dollar and its links to world trade as a weapon to bring enemies and allies into line with its global foreign policy."
Bank of America Merrill Lynch analysts also see the global deleveraging of the US dollar as an upward trend that will benefit gold prices.
"We believe that dedollarization could also lead to an increase in the share of gold holdings in gold portfolios," analysts said in a report released last month.
The central bank 's gold demand continued to attract market attention after an unprecedented demand last year. According to data from the World Gold Council, in 2018, central banks bought a total of 651.5 tons of yellow metal, the largest increase recorded in about half a century.
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