China Grants New Gold Import Quotas to Banks Despite Record High Prices
Several Chinese banks have been given new gold import quotas from the central bank, anticipating revived demand despite record high prices, sources told Multibagger. The quotas were granted in August after a two-month pause, aiming to help the People's Bank of China (PBOC) control how much bullion enters the country.
Gold has gained 21% so far this year, reaching a peak of $2,500.99 per ounce as the dollar weakened and U.S. monetary easing is anticipated in September. Analysts believe that strong Chinese buying could further boost prices if demand picks up again.
While jewellery demand remains weak, investment demand is healthy, according to sources. The PBOC did not immediately respond to Multibagger' request for comment.
China's central bank held back on buying gold for its reserves for a third straight month in July, with gold holdings standing at 72.8 million fine troy ounces. The PBOC was the world's largest single buyer of gold in 2023, with net purchases of 7.23 million ounces, as reported by the World Gold Council.
Dealers in China were offering a discount on international spot prices this week, signaling muted demand. However, trading volumes on the Shanghai Gold Exchange are expected to pick up at the end of August through September.
Overall, the new gold import quotas in China could impact global gold prices and investor sentiment. As Chinese demand plays a significant role in the gold market, monitoring these developments is crucial for investors looking to understand potential price movements in the precious metal.