The Chinese central bank has been continuously buying gold for almost a year and a half

March marked the 17th consecutive month that the People's Bank of China (PBOC) has been purchasing gold. The PBOC has been instrumental in setting new records for the precious metal. In the first month of spring, China's gold reserves, stored in the basements of the RVOS, increased by 0.2% to reach 72.74 million troy ounces or 2,262 tons, according to the central bank. Bloomberg notes that this is the smallest increase in PBOC gold reserves during the entire 'gold rush', which has been ongoing since November 2022. In February, central banks of dozens of countries, led by the main banks of China and India, continued to increase their gold reserves. According to the World Gold Council (WGC), February marked the ninth consecutive month of growth in gold reserves worldwide. In the last winter month, central banks purchased 58% less precious metal in February than in January.

China's official gold reserves are now the largest since November 2015, and its total foreign exchange reserves rose to $3.2457 trillion in March, the highest since December 2021. The leadership of the Chinese central bank is increasing reserves to stabilize them and protect against potential currency and other shocks. Furthermore, gold is a dependable safeguard against Western sanctions. During recent negotiations, US Treasury Secretary Janet Yellen warned her Chinese counterpart about the consequences of China's assistance to Russia. China's gold and foreign exchange reserves increased by 0.6% in March compared to February, and grew by 1.9% annually.

As time passes, it becomes easier to explain these record-breaking figures. The recent record-breaking gold price can be attributed to the challenging geopolitical climate and pessimistic forecasts for the global economy. During turbulent times, central banks typically rely on both currency, particularly the US dollar, and gold. However, due to the recent seizure of Russian foreign currency assets in Western banks and ongoing discussions about their confiscation, not all central banks are willing to continue trusting the United States and its European allies. The People's Bank of China is among those banks that are hesitant to trust them.