China has emerged as a prolific buyer of gold as the trade skirmish with the US heats up and it tries to find a hedge away from currency.

Bloomberg has reported that China has extended its recent gold buying bonanza, adding to strategic reserves for the sixth straight month.

It reported that the People’s Bank of China increased its bullion reserve to 61.61 million ounces — which is up from 61.1Moz a month earlier.

Analysts have put the reason for the buying spree down to a determined move away from currency reserves.

“It’s a diversification away from the U.S. dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,” Bloomberg quoted Bart Melek, global head of commodity strategy at TD Securities, as saying.

“We have to remember that gold is nobody’s liability.”

Gold has been playing its role as an investment safe haven during the past month, with prices hitting all time highs on the back of trade tensions.

READ: Why gold just hit an all-time high

However, Bloomberg noted that China hasn’t traditionally been a big buyer of gold — when the central bank announced a 57 percent jump in reserves back in 2015 it was the first update in six years.

 

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