According to a report from Reuters this week, industry players expect China to continue buying gold once prices ease from their record highs in May.

Last week, data showed that China’s gold holdings were unchanged in May. This resulted in a sharp move lower for the yellow metal, which closed Friday’s session down by more than 3%, below the $2,300 mark.

China is the biggest official buyer of the precious metal and had been adding to its gold reserves for 18 consecutive months. 

David Tait, CEO of the World Gold Council, shared his insights on China’s gold buying strategy with Reuters at the Asia Pacific Precious Metals Conference in Singapore, stating, “China’s data did show a pause,” but they are just waiting and watching.

He believes that if the prices decline to the $2,200 per ounce level, they will resume again.

As of 07:08 am ET on Tuesday, gold is trading at $2,306.

Gold hit a high of almost $2,450 on May 20, driven by expectations of a Federal Reserve interest rate cut, geopolitical tensions, and central bank purchases.

Reuters, citing the World Gold Council, said China was the biggest official sector buyer of gold in 2023, with net purchases of 7.23 million ounces, or 224.9 metric tons.

In addition, they said a survey run by the Official Monetary and Financial Institutions Forum revealed central banks plan to continue to increase their exposure to gold in the next 12 to 24 months.