According to the latest data released by the Peoples Bank of China on September 7, as of August 2019, Chinas gold reserves stood at 62.45 million ounces, an increase of 190,000 ounces annually over the previous nine consecutive months.
The central bank spent 34.6 billion yuan to increase its gold holdings in nine months
By December 2018, the central bank had not increased its gold holdings for more than two years (26 months).
Since December last year, the central bank has started the buy and buy model of gold, increasing its holdings by 3.21 million ounces for nine consecutive months: 320,000 ounces for the first time in December 2018; 300,000 ounces to 500,000 ounces from January to July 2019; and 190,000 ounces in August just ended.
Since June, influenced by multiple factors, gold has started a long-standing strong rise, including a 7.73% rise in June, the best monthly performance in two years, a slight increase of nearly 1% in July, another 7.23% rise in August, and the price of gold has risen to $1500 in one fell swoop, even once exceeded $1560, the highest level in more than six years.
According to the latest gold price, the current price of one ounce of gold is $1515, and 32.1 million ounces of gold is equivalent to $4.863 billion, or 34.6 billion yuan.
At present, it is in the fifth gold holding cycle of the central bank.
From 1978 to 1980, Chinas gold reserves stood at 12.8 million ounces; in 1981, they slightly dropped to 12.67 million ounces and remained until November 2001.
In December 2001, Chinas gold reserves increased to 16.08 million ounces and remained unchanged for a year; in December 2002, gold reserves increased again to 19.29 million ounces until March 2009.
In April 2009, the central bank bought 14.6 million ounces of gold, bringing Chinas gold reserves to 3389 million ounces.
Since December 2018, the central banks gold reserves have increased from 59.24 million ounces to 62.45 million ounces for nine consecutive months.
Since 2012, the gold bear market has lasted for seven years. The price of gold in 2015 was close to halving, reaching a low of $1045 per ounce, which coincided with the last round of the central banks gold holding cycle.
In the fourth quarter of 2018, when global risky assets were pulled back, gold stood out and won most of the worlds assets, and the central bank opened the gold holding cycle again.
The latest report of the World Gold Association shows that central banks continue to accumulate gold reserves at a healthy rate. As of July this year, the worlds official gold reserves totaled 34,407.58 tons. In addition, a survey conducted by the World Gold Association shows that the global central bank gold reserves will rise by 54% in the next year and remain unchanged by 38%, but no respondents believe that gold reserves will decline.
Global gold ETF positions increased in August
According to the latest data released by the World Gold Association, the total holdings of gold ETF increased by 5% to 2733 tons per month in August, which was only 2% higher than the historical peak at the end of 2012, and the price at that time was about 9% higher than the current level.
By the end of August, global gold ETF holdings had risen by 292 tons, driven mainly by strong inflows in the past three months. From June to August 2019, the size of global gold ETF positions increased by 13%, mainly due to the two-year/10-year Treasury bond yield curve upside-down caused by the decline in global interest rates and the continued geopolitical tensions between China and the United States.
Gold prices continued to rise by about 7% in August, bringing the global gold ETFs asset management scale to $134 billion.
North America continued to dominate gold ETF inflows in August, with a 78-ton increase in positions, surpassing Europe as the largest inflow region in 2019; Europe attracted 33 tons of net inflows, mainly from the UK, as sterling continued to weaken and the possibility of a hard break-out increased; Asia attracted 9 tons of net inflows, reversing net outflows since this year. Situation.
Through over-the-counter products, futures contracts and ETF, global gold trading continued to rise, reaching an average of $219 billion a day, 92% higher than last years level, the report said. The putting/subscribing skewness is still at an extreme level, suggesting that investors are willing to buy future gold options at higher prices, rather than selling them, highlighting the continuing bullish sentiment in the market.
We expect risk aversion for the rest of the year, which should support gold demand. In particular, stock markets in the United States and other parts of the world are expected to sell off by the end of the year. On the other hand, as bond yields have fallen sharply, bond yields are expected to continue to rise for the rest of the year, which should put downward pressure on gold prices, Gambarini said on Friday. Overall, we believe that gold prices will remain at current levels for the rest of the year.
According to Huatai Macro-Li Chaos team, gold has multiple attributes of Finance and commodities, which helps to regulate and optimize the overall risk-return characteristics of the international reserve portfolio. Under the circumstances that there are still many market risk factors and the probability of US dollar entering the downward channel, we are still firmly optimistic about the value of medium and long-term gold investment.
Source: Liu Song_NBJ9949, Responsible Editor of China Foundation Newspaper