China stops buying gold – 'too expensive'

Published 9 August 2024 at 16.19

Economy. China's central bank has paused its gold purchases for the third month in a row in July, which analysts say is because it believes prices are too high. At the same time, interest in buying gold has increased significantly among the general public.

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The interest can be seen in a sharp increase in Google searches for “buy gold” after the last this week's stock market fall.

Although China was the world's largest buyer of gold last year, they have now chosen to hold off on new purchases.

The price of gold has risen by almost 18 percent so far this year, but analysts believe that China is unlikely to increase its gold reserves before prices fall.

Gold prices hit $2,522 per troy ounce on August 2 but have since fallen by more than 3 percent.

Despite this several analysts are revising their forecasts, predicting that the price of gold could reach new record highs due to geopolitical tensions, expected rate cuts and uncertainty ahead of the US election.

Goldman Sachs predicts a gold price of $2,700 next year, while the median forecast for the fourth quarter of this year is at $2445, just above today's level.

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