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China engages in a frenzy of buying bullion. The world's second-largest economy increased its gold reserves for the fourth consecutive month, adding to the optimism that central banks would continue to increase their holdings.
The People's Bank of China increased its reserves by 60.26 million euros a month earlier in March, according to data published on its website. In terms of tonnage, the inflow last month was 11.2 tonnes, following the addition of 9.95 tonnes in February, 11.8 tonnes in January and 9.95 tonnes in December.
China, the world's largest producer and consumer of gold, is facing signs of a slowing economy, even as trade talks with the United States have progressed. The latest data from the PBOC indicate that the country has resumed adding gold to its steady pace reserves, much like the period from mid-2015 to October 2016, when the country increased its holdings almost every month. If China continues to accumulate bullion at this rate in 2019, it could well finish the year as the first buyer after Russia, with an additional 274 tonnes in 2018.
Governments around the world added 651.5 tons of ingots in 2018, the second highest total ever, according to the World Gold Council. Russia quadrupled its reserves in the space of a decade as President Vladimir Putin sought to end his dependence on the US dollar. Data from the central bank show that badets rose 1 million ounces in February, the highest since November.
The spot gold price fell for a second straight month in March, even after the US Federal Reserve announced it would stop interest rate hikes for the rest of the year, which would have led to a rise in shares. Nevertheless, the long-term outlook is more optimistic as central bank purchases should support prices, with revenues as high as last year, said Goldman Sachs Group Inc., which is waiting to an increase of $ 1,450 an ounce over 12 months. The bullion for immediate delivery was $ 1,291.76 on Friday.
China has already spent long periods without revealing an increase in its holdings of gold. When the central bank announced a 57% jump in its reserves, which stood at 53.3 million ounces in mid-2015, it was the first update in six years. The last break was from October 2016 to December of last year.
China's foreign exchange reserves continue to gain moderately on valuation effects
China's foreign currency holdings increased for a fifth month, as weaker government bond yields in developed markets pushed valuations higher.
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Reserves increased by $ 8.58 billion to reach $ 3.0988 billion in March, the People's Bank of China announced on Sunday
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The reading compares to $ 3.09 billion the previous month and the median estimate of $ 3.09 billion in a Bloomberg survey of economists
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"The rise in government bond prices in developed markets has probably contributed to a positive valuation effect", although weak currencies have caused some loss of value, according to Wang Tao, general manager
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Economist for China at UBS Group AG. in Hong Kong
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The stock rose on the price gains of financial badets in March, the State Exchange Administration said in a statement, adding that the holdings would likely remain stable due to the increased flexibility of the yuan and foreign exchange. Reasonable economic growth
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The price of government bonds in major economies could continue to rise due to deteriorating global economic outlook and accommodative monetary policy
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