China's gold-buying spree tops 100 tons during trade war

China's gold-buying spree tops 100 tons during trade war

The People's Bank of China picked up more gold last month, raising holdings to 62.64 million ounces in September from 62.45 million in August, according to data on its website.

Last month, the price of gold skyrocketed to its highest level in six years, highlighting the uncertainty investors have been feeling about the global economy. Central banks have been major buyers too, especially in emerging markets.

Official purchases will likely continue as protectionist policies and geopolitical concerns add to demand, said Suki Cooper, precious metals analyst at Standard Chartered Bank.

"Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function", said Howie Lee, an economist at Singapore-based Oversea-Chinese Banking Corp.

Neil Wilson, chief markets analyst at Markets.com, says that gold is now a "good buy", and China's increase "chimes with the flows we've seen in recent weeks that's pushed prices a lot higher".

Gold prices eased on Monday as the dollar firmed up a little bit ahead of minutes from the latest Federal Reserve meeting due this week and trade talks with China scheduled in Washington on October 10-11.

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The rise in bullion investments is occurring against the backdrop of a lukewarm trade war that has seen the USA and China exchange multiple rounds of mutual tariffs on imports.

At 12:02 GMT, December Comex gold is trading $1509.80, up $5.40 or +0.37%.

Jobs growth in the United States slowed in September and wage growth stalled, even as unemployment dropped to a 50-year low, a report on Friday showed.

More specifically, per data released by the Central Bank of Russian Federation in September, Moscow augmented its stockpile of gold by more than $7.5 billion in one month.

Traders are also waiting for retaliation after U.S President Trump announced a blacklist expansion against several Chinese tech companies as well as blocking government pension funds from investing in China.

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