The People’s Bank of China (PBOC) announced that it bought 5.9 tons of gold in September to diversify its foreign exchange reserves and become less reliant on the US dollar as trade war negotiations are set to resume.
Prior to September China’s central bank went on a staggering 99 ton gold buying spree since January of this year.
At the same time, central banks around the world bought 374.1 tons of gold in the first six months of this year alone, according to the World Gold Council. This comes as central banks purchased 651.5 tons the previous year, a dramatic 74 percent year-on-year surge.
Gold is considered a safe haven investment and retains true value compared to unbacked national currencies around the world.
Spot gold prices have risen steadily as central banks have been buying gold to safeguard national economies in case of a potential recession that will likely have global ramifications. Gold prices today reached upward to $1,511 per ounce (or around 31 grams).
Analyst have predicted gold prices to surge as high as $2,000 per an ounce by next year as the US-China trade war has created uncertainty in the global economy.
US and China trade representatives are set to meet in Washington for another round of trade talks on Thursday.