Data show that in November 2022, my country's central bank will increase its holdings of gold by 1.03 million ounces.
Prior to this, my country's gold reserves have remained at 62.64 million ounces for three consecutive years since September 2019.
In December 2022, the central bank will continue to increase its gold holdings by 970,000 ounces.
At the end of January this year, my country's gold reserves reached 65.12 million ounces, an increase of 480,000 ounces compared with the end of December last year, increasing gold holdings for three consecutive months, and the increase scale reached 2.48 million ounces.
Affected by this, the valuation of China's gold reserves reached US$125.283 billion at the end of January, an increase of US$8.048 billion from the US$117.235 billion at the end of last year, attracting more attention.
Why have you increased your holdings of gold for 3 consecutive months?
In the eyes of industry insiders, it is mainly affected by several factors: First, in view of the increasing volatility of the global financial market in the future, relevant Chinese departments can effectively reduce the fluctuation of the scale of foreign exchange reserves by increasing their gold holdings, ensuring stable fluctuations in the amount of foreign exchange reserves; It is the changes in the international situation that have accelerated the pace of asset diversification in China's foreign exchange reserves. As a traditional safe-haven asset and super-sovereign asset, gold can bring better asset protection; third, as China's foreign exchange reserves continue to rise, relevant departments are also It is necessary to increase the holdings of gold to keep the proportion of gold at a relatively reasonable level.
"The People's Bank of China continues to increase its gold reserves. The main purpose is to optimize the structure of foreign exchange reserve assets, promote the diversification of foreign exchange reserve assets, and enhance the ability of foreign exchange reserve assets to resist fluctuations in the global financial market and asset stability. In terms of the global environment, the Fed raises interest rates As the end draws to a close, the outlook for the U.S. dollar is weak, and the global political and economic situation remains highly uncertain, which to a certain extent increases the attractiveness of gold reserves." Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, said.
Pang Ming, Chief Economist and Director of Research Department of Jones Lang LaSalle Greater China, believes that gold has multiple attributes of finance and commodities, and has the advantages of hedging, anti-inflation, and long-term value preservation and appreciation.
Adding and dynamically adjusting gold reserves in the portfolio allocation of international reserves can adjust and optimize the overall risk-return characteristics of international reserves, diversify and rebalance international reserve assets, and help coordinate and maintain the security, liquidity and profitability of international reserves.
The central bank increases its holdings of gold reserves with bargain-hunting as the main means of operation, which is an advance preparation and effective method to optimize and adjust the structure of reserve assets and hedge against the risk of depreciation of US dollar assets through market-oriented means.
In recent years, facing the turbulent external environment, "hoarding gold" has become a common action of central banks around the world, and the demand for gold asset allocation continues to expand.
According to data recently released by the World Gold Council, the global central bank's demand for gold purchases will reach 1,136 tons in 2022, a record high in 55 years, and it is the 13th consecutive year of net increase in gold reserves.
For a long time, the proportion of gold in the foreign exchange reserves of Western countries has always exceeded 50%, and the proportion of gold in many emerging market countries has also reached 8% to 10%.
According to incomplete statistics, as of the end of January this year, China's gold reserves accounted for only 3.93% of foreign exchange reserves, which is lower than many emerging market countries and Western countries.
The central banks of various countries are actively increasing their gold holdings mainly out of the consideration of avoiding credit currency risks and diversifying reserve assets.
In fact, the proportion of gold reserves in the foreign exchange reserves of European and American countries is relatively high, which promotes the cross-border circulation of European and American currencies.
People in the industry believe that the increase in gold purchases by global central banks is by no means based on short-term rises in gold prices to profit, but to allocate gold from a longer-term perspective.
Specifically, one is optimistic about the hedging function of gold under the trend of increasing fluctuations in global financial asset prices, which will help reduce the fluctuations in the scale of foreign exchange reserves; It can also play a better role in anti-inflation and asset preservation.
Looking ahead, industry insiders predict that relevant departments in China will continue to increase their gold reserves in the future.
After all, in the face of the risk of violent financial market fluctuations derived from the increased risk of recession in Europe and the United States, increasing gold holdings can better ensure the stable fluctuation of China's foreign exchange reserves.
"The increase in China's gold reserves in January 2023 has slowed down compared to November and December 2022, which may also be related to the recovery of gold prices. Affected by factors such as the weakening of the US dollar index and the slowdown in the pace of interest rate hikes by the Federal Reserve, the future The overall price of gold is expected to maintain a strong trend and continue to fluctuate upward.” Pang Ming said that the current proportion of gold reserves in China’s foreign exchange reserves is still very low, and the total amount of gold reserves still does not match China’s economic volume and total foreign exchange reserves. Considering the needs of financial security and diversification of reserve assets, there is still room to increase gold holdings in the future.
Yao Jin