In an unabated buying spree, China has continued to expand its gold reserves for a seventh consecutive month, reinforcing the sustained global demand for the precious metal among central banks.

As per Wednesday’s data from the People’s Bank of China, the nation’s gold holdings saw an approximately 16-ton increase in May. This surge brings the total stockpile to roughly 2,092 tons, following an addition of 144 tons from November through the previous month.

In the wake of escalating geopolitical uncertainty and persistent global inflation, central banks worldwide set a record in gold purchases last year. Despite experiencing a significant drop in the first quarter of this year, according to the World Gold Council, market analysts expect the strong buying trend to persist.

A recent council survey disclosed that around a quarter of global central banks plan to bolster their holdings over the forthcoming year. This comes amidst mounting skepticism regarding the future role of the US dollar.

Ruth Crowell, the Chief Executive Officer of the London Bullion Market Association, in an interview with Bloomberg TV, predicted that this robust demand from central banks is set to continue through the year.

The collective purchases of central banks accounted for nearly one-fourth of the global gold demand last year. This ongoing procurement is expected to provide support to gold prices, which hit an all-time high in May. In the first quarter of the year, only Singapore outpaced China in terms of gold purchases.

China’s intensified gold acquisition, which commenced in November, is the first since a 10-month rally that concluded in September 2019. The previous significant inflow ended in late 2016.

In the meantime, the People’s Bank of China reported a decrease in the country’s end-May foreign currency reserves, which dropped from $3.20 trillion to $3.18 trillion compared to the preceding month.