Gold and silver prices are up higher in early U.S. trading Thursday. Switzerland’s central bank Thursday unexpectedly cut its main interest rates for a second consecutive time and overnight China bank officials kept one- and five-year prime loan rates unchanged. Meanwhile, the Bank of England will keep rates steady today. Gold is trading at $2340.39, up $12.23. Silver is trading at $30.15, up 36 cent. Chen Long of Plenum Research examines the mystery behind China’s massive gold-buying spree, which has driven a significant gap between the country’s reported gold holdings and its production and imports. While the People’s Bank of China (PBOC) has officially increased its gold reserves, the size and growth are not particularly large compared to other countries. The bulk of China’s gold demand comes from retail consumers and commercial banks, with the latter reducing their holdings substantially in recent years due to regulatory changes. However, Long highlights a puzzling gap of over 1,300 tonnes between China’s reported gold figures and its production and imports in 2023, suggesting a mysterious buyer could be stockpiling gold, potentially the PBOC itself or other state-linked entities aiming to diversify away from the U.S. dollar.
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