China Buys 8 Tons of Gold

China’s central bank increased its gold reserves once again in April, purchasing 8 tons of gold as Beijing continues its strategy to reduce dependence on the U.S. dollar and strengthen strategic reserves.

According to reports, China has been consistently adding to its gold holdings for the past 18 months, pushing total official reserves above 2,321 tons. Meanwhile, countries such as Poland and Uzbekistan are also taking advantage of lower prices to expand their gold reserves.

While central banks continue buying gold aggressively, U.S. monetary policy remains a major pressure on the market. Inflation in the United States recently climbed to 3.8%, reducing expectations for rapid interest rate cuts. As a result, yields on 10-year U.S. Treasury bonds have risen to around 4.54%.

Higher interest rates have weakened gold’s appeal among private investors because the precious metal does not generate regular yield. Many traders have recently taken profits and reduced positions, but central banks continue absorbing supply through large-scale purchases, preventing a deeper decline in prices.

Despite recent weakness, gold is still up nearly 5% since the beginning of the year. Analysts believe the short-term direction of the gold market will largely depend on U.S. real interest rates. If bond yields decline in the coming weeks, one of the biggest obstacles for gold prices could disappear.