PBoC will continue to buy Gold in the coming months – Commerzbank

FXStreet Insights Team FXStreet

Economists at Commerzbank expect the Gold price to remain supported as the PBoC is set to continue buying Gold.

Chinese central bank continues to buy Gold

The Chinese central bank (PBoC) continued to increase its Gold reserves in February for the 16th consecutive month. According to the PBoC, Gold reserves increased by around 390 thousand ounces month-on-month, which corresponds to purchases of 12 tons.

In addition, the ongoing debate about the possible use of frozen Russian assets for the reconstruction of Ukraine is likely to have significantly increased the sanctions risk of investments in US Dollars or Euros from the PBoC's perspective. This suggests that the PBoC will continue to buy Gold in the coming months, which should therefore remain a support for the Gold price.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD revisits 1.1780, or daily lows

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to reach daily troughs on Thursday. The pair’s decline comes in response to a sudden bout of USD strength amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD makes a U-turn, challenges 1.3500

GBP/USD rapidly leaves behind Wednesday’s strong advance, putting the 1.3500 support to the test on Thursday. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold sticks to the bid bias, flirts with $5,200

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The precious metal adds to Wednesday’s optimism despite the Greenback trades in a firm fashion, although geopolitical tensions in the Middle East keep the yellow metal bid for now.