Gold prices breach crucial support of US$1,130/oz

China gold reserves increased by 57% to 1,658 tons over the past six years, accounting for just 1.65% of the country’s total foreign exchange holdings.

Gold prices have breached the crucial the support of US$1,130/oz in the Asian trading session today and in the process have registered a multi-year low of US$1,087.4/oz. The precious pack is dented by the fact that vibes from US Federal Reserve and flow of economic numbers indicate that rate hike this year is very much on the cards. In addition, China’s national gold holdings number released over the weekend has also not helped the sentiment either. The country’s gold reserves increased by 57% to 1,658 tons over the past six years, accounting for just 1.65% of the country’s total foreign exchange holdings. The number was much less than the perception of China holding more than 3,000 tons.

Nevertheless, China is now the sixth largest gold holder in the world after the US, Germany, the IMF, Italy and France. China has reported this number after a gap of 6 years. There is lot of curiosity and mystery over China’s stockpiling activity of gold.

However, the recent release clearly indicates that Chinese appetite for the yellow metal has clearly mellowed down. Palpable slowdown in economic growth has adversely impacted the overall consumption.