Yesterday, rising U.S. Treasury yields and a stronger currency put pressure on gold, which finished the day down -0.14% at 715554. According to data from the World Gold Council, central banks purchased a net 10 tonnes of gold in May, a substantial decrease from the 56% increase in April and well below the 42 tonnes 12-month average.
The central bank’s decision to end its 18-month buying binge in May had a significant effect on China’s gold market. Regarding consumer spending, U.S. data released last week showed that prices remained stable in May.
As per the statement made by the President of the San Francisco Federal Reserve Bank, the fact that inflation remained constant between April and May suggests that the policy measures are working. With a notable decrease in net imports to 34.6 metric tonnes from 55.8 tonnes, gold imports to China through Hong Kong decreased by 38% in April over March.
The first quarter saw China use 308.91 metric tonnes, an increase of 5.94% year over year. This reduction contrasts with the high levels of consumption in that period. Because of its high price and the hope that import duties will be lowered in the next budget, gold demand in India remained modest.
