Gold climbs $25 as China continues to accumulate reserves

The PBOC bought gold for the second consecutive month, data released earlier today showed.

Reserves rose to 73.29 million fine troy ounces from 72.96 million fine troy ounces last month. The pace of buying roughly doubled as the increase of 0.33m oz compares to the rise of 0.16m oz in November.

The value of Chinese reserves is about $191 billion compared to FX reserves of $3.2 trillion US dollars. The believe is that they would like to slowly rebalance that towards gold in light of Russian reserve confiscation following the Ukraine war.

In terms of market moves, gold is up $27 to $2662, which is $3 shy of Friday’s intraday high of $2665. A break above would be the best level since December 16.

For the next move, watch the US dollar today and for the remainder of the week. We get the ISM services report at 10 am ET and on Friday, we will get the latest non-farm payrolls report. Any sign of weakness could hurt the dollar and give gold a lift.

See:

• Goldman Sachs trim its gold forecasts, gold not to reach US$3000 in 2025

This article was written by Adam Button at www.forexlive.com.