China gold reserves rise
Gold has had two great months but has languished for years. One reason is that global gold reserves have been stagnant or falling in many countries.
However that could be changing after China added to its reserves in December for the first time in two years.
It was a small amount, but notice the tiny tick higher at the end of this chart:
Total holdings at year end were 1852 tons but increased 10 tons from the prior month.
You can see from the chart that China doesn’t tend to move in half-measures. It could be the blip but it could be the start of another leg up and that kind of buying would be a tailwind.
But beware that Chinese buying isn’t the whole story. The last big leg up in purchases came in the second half of 2015 and gold fell about 10% in the second half of that year. What could be especially notable this time is that China may be buying gold as it reduces Treasury holdings. That would be a double-whammy for gold of action to weaken the dollar and buy gold.
If you’re trading, know that this data has been out there for a couple weeks so there’s no special reason to buy now. However watch out for the January data later this month to see if that little tick is the start of a trend.