China likely to resume gold buying despite recent pause

China is likely to resume its significant gold purchases, despite a recent pause, due to low gold reserves, geopolitical tensions, and price sensitivity, according to a policy insider, industry experts and data.

China’s gold holdings remain low compared to its economic stature and the reserves of other major economies. A policy insider revealed China sees a need to increase its gold reserves in absolute and relative terms.

Geopolitical risks like conflicts in Ukraine and the Middle East drive China’s gold demand in recent years.

Analysts believe China will continue substantial gold purchases for years to come, potentially reaching a 10 per cent share of its total reserves (currently at 4.9 per cent).  This could translate into an additional $170 billion investment in gold.

China was the top global buyer of gold in 2023, purchasing a record 7.23 million ounces.

Attribution: Reuters