China offers banks extra gold import quotas as investors flock
me-metals: The People’s Bank of China has allocated fresh gold import quotas for some commercial banks, people familiar with the matter said, as Beijing responds to strong haven demand from institutional and retail investors in the face of an escalating trade war.
According to me-metals cited from mining.com, The central bank typically limits the amount of physical bullion coming into the world’s top-consuming market. The additional quotas were allocated last week to meet significantly increased appetite, the people said. They asked not to be named as the decision is not public.
Gold prices have doubled since the end of 2022, with investors piling in at a time of geopolitical uncertainty. Trade tensions have only heightened appetite for bullion, which has repeatedly touched records over the last few months.
Chinese demand has also been shored up by a pilot program that allows insurance funds to invest in gold, as part of efforts to optimize their asset allocations. Inflows to onshore bullion-backed ETFs, driven by retail investors, have also been unusually strong.
The decision to issue the additional quota is part of the central bank’s routine functions and follows requests from commercial banks, the people said. They added it should not be interpreted as a view on prices or a sign of central bank purchases.
The People’s Bank of China did not immediately reply to a fax inquiry. Gold surged 6.6% last week and prices clinched yet another record of $3,245.75 an ounce on Monday. In the latest round of bullish calls from analysts, Goldman Sachs Group said the metal could hit $4,000 by mid-2026.
source: mining.com
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