BEIJING – Despite efforts to reach an agreement and end the trade war, Beijing and Washington are increasingly bogged down in economic struggles.
A few days ago, US President Donald Trump announced his intention to impose new tariffs on Chinese goods valued at $300 billion.
This decision comes shortly after the US president blamed China for manipulating its currency.
Beijing has been buying gold for eight consecutive months, having added 10 tons of the precious metal to their only reverse over the past month, according to reports Bloomberg.
China has purchased 94 tons of gold bullion, considered a safe investment asset.
According to the People’s Bank of China, the country’s precious metal reserves amount to about 1,945 tonnes, equivalent to about $ 90 billion at current prices of about $1,500, per ounce.
Meanwhile, the price of gold has peaked in the last 6 years due to the slowdown in the world economy, with central banks lowering interest rates.
As Societe Generale analysts point out, China has been buying gold regularly to diversify its reserves, move away from the US currency and protect itself against the risks of trade war .
The growing threat of a currency war in recent days could increase this momentum, revealing a global demand for gold, the analyst group explained
These statements were confirmed by the chief executive officer of the commodities market at investment bank BMO Capital Markets, Colin Hamilton, saying that the ruling of the People’s Bank of China demonstrates de-dollarization
In addition to China, the Central Bank of Russia has purchased 96.4 tonnes of gold since January this year, confirming that by July 1, total gold reserves had reached $ 100.3 billion. In June alone, the country added 18 tons more to its reserves, reaching a total of 2,208 tons.
Last week Russia’s gold reserves surpassed the $ 100 billion mark amid news of Chinese companies receiving contracts for gold smelting and refining in Africa.
Precious metal prices are steadily rising, rising by about 1.6% per year and reaching an incredible 11% over the past two months, Market Watch reports .