MicroWaveApr 5, 2024

What's behind China's gold-buying spree?

https://lemmy.world/post/13942284

What's behind China's gold-buying spree? - Lemmy.World

For more than a year, China’s central bank has been buying up large amounts of gold. The move, along with the wars in Ukraine and Gaza, have helped spike the price of the precious metal to new highs. The price of gold broke the $2,300 (€2,212) level for the first time this week as geopolitical issues, expectations of US interest rate cuts and China [https://www.dw.com/en/china/t-18480887]’s accumulation of the precious metal spurred interest from speculators. Gold is seen by investors as a safe haven in times of turmoil and a hedge against currency devaluation, so the conflicts in the Middle East and Ukraine have helped the recent price rise, along with the post-COVID inflation spike. The move by China’s central bank, the People’s Bank of China (PBC), has been mirrored by other mostly emerging market central banks, who are all keen to up their gold holdings. DW takes a look at why Beijing has gone on a gold-buying spree.

Show threadar0177417
They are making their own BRICS currency again the US Dollars. That’s why they are buying gold.
Apr 5, 2024 at 6:18pmWeb
Show threadharkApr 6, 2024
Not sure why you’re getting downvoted. The article goes over how it plans to counter the trade war with the US and potential economic sanctions. There has been talk in the past of a gold-back yuan. Not exactly a BRICS combined currency, but would likely be used by BRICS countries in competition with the US dollar.
Gold-backed yuan may challenge flagging dollar

TOKYO - Long-time gold bulls owe Jerome Powell a debt of gratitude as the easiest credit policies ever to pour out of Federal Reserve headquarters send the yellow metal into the stratosphere. Gold’s surge to record highs, though, has Asian central banks thinking about actual debt, and the idea of gratitude has no role in this collective brainstorming. The jump in gold to about US$2,000 per ounce, and corresponding resurrection of Bitcoin values, is not about inflation, but rather waning trust in the US dollar. That waning trust may be good news for America’s number one competitor China – where hints of an upcoming gold-renminbi exchange standard could provide traders, markets and banks with a compelling new currency: an international gold-underwritten yuan. Markets don’t tend to move in straight lines, of course. The rally took a breather on Wednesday, with gold posting its biggest drop in seven years. That’s partly a reaction to a slight upward bump in US producer price inflation, and partly investors locking in their winnings.

Asia Times