Today’s confirmation that China has added to its official holdings of gold since 2009 is not necessarily bullish for prices. This is buying that has already taken place and the increase was (arguably) less than might have been expected given the surge in total reserves over this period. Nonetheless, we expect further official purchases by China to be one of several factors supporting the price of gold in the next year or two, despite the prospect of tighter US monetary policy and renewed strength in the dollar.
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