As China continues to increase its gold reserves, a "gold accumulation race" among central banks continues in the global gold market. Adding to the mix are geopolitical tensions in the Middle East, and gold prices are once again rising above the $5,000 per ounce level.
According to foreign media reports on the 6th (local time), the People's Bank of China (PBOC) purchased an additional 30,000 troy ounces of gold last month. This brought China's total gold reserves to 74.22 million troy ounces.
This purchase demonstrates the continuation of China's gold-buying cycle, which began in November of last year. China has been steadily purchasing gold in recent years, expanding the proportion of its foreign exchange reserves.
In the market, central banks' gold purchases are considered a key factor supporting global gold prices. In particular, amidst the movement to reduce dependence on the dollar-centric financial system, analysis suggests that central banks around the world are accumulating gold again as a strategic asset.
Gold prices recently experienced a short-term correction, but maintained their upward trend and have now risen above the $5,000 per ounce level. This was largely due to investors shifting to safe-haven assets amid heightened tensions in the Middle East following the US and Israeli attacks on Iran.
Gold has traditionally been considered a safe-haven asset, attracting capital during crises such as war or financial instability. The current Middle East crisis is also serving as a catalyst for shifting global capital flows from risky assets to safe assets like gold.
The market is once again focusing on the potential for a mid- to long-term rise in gold prices, as central banks' increased gold purchases coincide with geopolitical tensions. In particular, if central banks continue to expand their holdings of gold as a strategic reserve asset, structural demand in the gold market is expected to grow further.
