Gold: Chinese reserve buying underpins prices – ING

ING strategists Ewa Manthey and Warren Patterson report that Gold is edging higher, supported by ongoing central bank demand and geopolitical risks. They emphasize sustained buying from China’s central bank, which continues to diversify reserves away from US Treasuries, although elevated real yields and a firm Dollar are seen limiting near‑term upside.

PBoC accumulation offsets macro headwinds

"Gold edged higher as signs of renewed buying interest emerged, supported by ongoing central bank demand and persistent geopolitical risks in the Middle East. China’s central bank remains a key structural support, with April marking another month of official reserve accumulation."

"The People's Bank of China reported its largest monthly gold purchase in over a year in April, extending its accumulation for an 18th consecutive month. Official reserves increased by 260,000 troy ounces (around 8 tonnes), the biggest monthly addition since December 2024. The continued buying underscores China’s strategic push to diversify reserves and reduce reliance on US Treasuries. Ongoing central bank demand has helped underpin market sentiment, even as some buyers – including Turkey’s central bank – have recently turned to gold sales to support domestic currencies."

"While recent US-Iran military escalation has lifted safe‑haven demand, gains have been tempered by a still‑restrictive macro backdrop, with elevated real yields, a firm US dollar, and reduced expectations for near‑term Federal Reserve easing continuing to cap the upside."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)