The central bank has been "hoarding" gold for 17 consecutive months

Time Finance

2024-04-08 18:34Published on the official account of Financial News under Beijing Beijing Time

On April 7, data released by the State Administration of Foreign Exchange showed that as of the end of March 2024, the size of the mainland's foreign exchange reserves was US$3,245.7 billion, an increase of US$19.8 billion, or 0.62%, from the end of February.

The State Administration of Foreign Exchange said that in March 2024, affected by factors such as monetary policies and expectations of major economies and macroeconomic data, the US dollar index rose, and global financial asset prices rose overall. Factors such as exchange rate translation and changes in asset prices combined to increase the scale of foreign exchange reserves in the month. The mainland's economic upward trend has been consolidated and strengthened, and the fundamentals of the long-term positive economy will not change, which will provide support for the scale of foreign exchange reserves to remain basically stable.

It is worth mentioning that in terms of gold reserves, China's gold reserves were 72.74 million ounces at the end of March and 72.58 million ounces at the end of February, an increase of 160,000 ounces month-on-month and the 17th consecutive month of increase.

According to Zhao Qingming, vice president of the Institute of Exchange Management, compared with major developed countries, the proportion of gold in China's reserve assets is relatively low, so it is necessary to moderately increase holdings, which is not only conducive to the diversification of international reserves, but also conducive to supporting the internationalization of the RMB.

"In recent years, central banks have increased their holdings of gold, mainly to optimize the structure of official reserve assets, promote the diversification of official reserve assets, enhance the ability to resist fluctuations in the global financial market, and enhance the stability of official reserve assets. Zhou Maohua, an analyst at the financial market department of Everbright Bank, said that the central bank's increase in gold reserves will help enhance the country's credibility and financing capacity in the international market.

In addition, Zhao Qingming said that it is also necessary to see that since the beginning of this year, gold prices have continued to climb and hit new highs. The PBOC's increase in gold reserves in March was the smallest in 17 months, and it is more rational for the PBOC to appropriately reduce its holdings of gold reserves at a time when gold prices continue to climb.

In fact, not only continental central banks, but also global central banks are "hoarding" gold.

According to statistics, as of the end of March 2024, the gold reserves of the top 10 countries in the world (the United States, Germany, Italy, France, Russia, China, Switzerland, Japan, India, and the Netherlands) were 24,260.63 tons, an increase of 15.58 tons from February, and an increase for 17 consecutive months.

Tianfeng Securities said that gold stands at the starting point of the medium and long-term bull market, and the elasticity of gold stocks is about 2.23 times that of the price of gold.

Guojin Securities believes that the Federal Reserve is expected to release an "easing signal" in Q2, which will become the starting point of the rising wave of gold stocks.

In addition, according to the Daily Economic News, a number of private equity believes that multiple positive resonances, the metal properties of resource products are activated, and the consumption of non-ferrous commodities is expected to drive the bullish commodity and open a wave of "periodic table" market. It is expected to drive commodities bullish and open a wave of "periodic table" market.

(Source: China Securities Journal, Gelonghui)

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