China cuts US bond holdings to 18-year low, turns to gold accumulation

MacroCommodityDigital Finance
โดย Kaohoon·CNUS·Read original
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China reduced its holdings of US government bonds to 633.4 billion dollars in June 2026, the lowest level since September 2008, a decline of more than 13 percent compared with the same period a year earlier. Meanwhile, the People's Bank of China continued to increase its gold holdings, with net purchases of around 20 tonnes in July 2026, the highest monthly buying pace since October 2023, lifting China's gold reserves to about 2,377.5 tonnes. Warawut Benjaputtarak, managing director of Hua Seng Heng Gold Futures Company Limited, said the shift reflects a restructuring of reserve management from a focus on returns toward stability, amid the United States' rising debt burden and widening budget deficit, as well as geopolitical risks. Gold demand from central banks worldwide also remains strong, with combined purchases of more than 289 tonnes in the second quarter, and a World Gold Council survey indicating that 45 percent of central banks plan to increase their gold holdings over the next 12 months. However, the decline in US bond holdings does not immediately boost gold prices, because if falling bond demand pushes real yields higher, it could pressure gold through rising opportunity costs. But over the medium to long term, diversification and concerns about US debt will provide important structural support for gold demand.

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