China’s stashing away more gold in its coffers as the central bank boosted bullion reserves for a fifth straight month, recording the biggest inflow since 2016 and reinforcing speculation that purchases will be sustained.
The People’s Bank of China raised reserves to 61.1mn ounces in April from 60.62mn a month earlier, according to data on its website on Tuesday. In tonnage terms, last month’s inflow totalled 14.9 tonnes and the increase follows the addition of almost 43 tonnes in the four months through March.
Central-bank buying has emerged as a key trend in the global market, and first-quarter purchases were the highest in six years as countries diversify assets away from the dollar, according to the World Gold Council.
The moves could help support prices, which remain little changed this year as investors cut holdings in exchange-traded funds. Beijing’s latest bullion addition comes amid a sharp escalation in trade tensions with the US and slump in equities.
“Banks buying is the underlying demand story which continues to develop from central banks seeking to de-dollarise their reserves,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. 
“What is missing for gold to move higher is a pickup in paper demand through futures and ETFs. Something that will happen if stocks run into a prolonged period of profit taking and/or the dollar stabilises.”
Official purchases could reach 700 tons this year should the China trend continue and Russia at least matches 2018 volumes of about 275 tonnes, Citigroup Inc. said in April, flagging a de-dollarisation trend. Last year, governments added 651.5 tonnes, the biggest rise since 1971, according to WGC data.
The latest data from the PBoC may signal a steady pace of additions lies ahead, much like the period from mid-2015 to October 2016, when it boosted holdings almost every month. 
China has previously gone long periods without revealing increases. When the central bank announced a 57% jump to 53.3mn ounces in mid-2015, that was the first update in six years.
Bullion for immediate delivery was 0.2 percent higher at $1,286.39 an ounce yesterday.
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