China’s gold reserves rose slightly at the end of December, reaching 74.15 million troy ounces, up from 74.12 million troy ounces in November. The value of these reserves also increased, standing at $319.45 billion in December compared to $310.65 billion the previous month.

This steady accumulation of gold is part of a longer trend beginning in November 2024, driven primarily by central bank purchases. China has been a major player in this trend, and there are ongoing suspicions that the country’s actual gold buying may be significantly higher than official figures indicate.

Looking ahead to the new year, fiscal concerns in major global economies, combined with efforts to move away from reliance on the US dollar, are expected to keep central banks active in gold buying. This suggests that the strong demand that has supported gold prices is unlikely to fade soon.

After a strong start to the year, gold prices have recently eased, dropping 0.7% to $4,465. The price reached a low of $4,441 earlier as selling pressure emerged following the latest price bounce.

For forex traders, it is important to note that going long on precious metals is currently a widely held stance. Such strong consensus can make positions vulnerable to sharp pullbacks, so careful risk management is advisable.

Original Source: Justin Low of investinglive.com