Affected by macroeconomic data, monetary policy and expectations of major economies, the scale of foreign exchange reserves rose in July 2024, and the People's Bank of China suspended its shareholding of gold for the third consecutive month.

As of the end of July, the size of foreign exchange reserves was $3,256.4 billion, an increase of $34 billion, or 1.06%, from the end of June, according to statistics released by the State Administration of Foreign Exchange on August 7.

According to statistics released by the State Administration of Foreign Exchange on August 7th, as of the end of July 2024, the country's foreign exchange reserves were $3,256.4 billion, an increase of $34 billion from the end of June, or 1.06%.

The foreign exchange bureau said that in July 2024, affected by macroeconomic data, monetary policy and expectations of major economies, the US dollar index fell and global financial asset prices generally rose. The composite effect of exchange rate conversion and asset price changes led to an increase in foreign exchange reserves that month.

Specifically, in recent trading days, the US dollar index has fluctuated, falling from above 104 in the previous period to around 102, and non-US currencies such as the yen have risen globally.

Industry insiders pointed out that with the rapid rise of China's economy and its increasing status in the global economy, the development of China's foreign exchange market has attracted much attention.

According to relevant data, the total trading volume of China's foreign exchange market has shown a steady growth trend in recent years. With the continuous development of the economy and the increasing degree of openness to the outside world, the demand for foreign exchange transactions is increasing, and the trading volume in both the interbank market and the retail market is constantly rising.

Looking ahead, the foreign exchange bureau pointed out that China's economic operation is generally stable, steadily advancing, continuing the trend of recovery and improvement, which is conducive to maintaining the basic stability of foreign exchange reserves.

Suspension of shareholding for the third consecutive month.

On the same day, data from the People's Bank of China showed that gold reserves at the end of July were 72.8 million ounces, or about 2,264.33 tons, the same as the previous month, and the third consecutive month of suspending the increase in gold holdings since May, ending the policy of increasing gold holdings for 18 consecutive months since November 2022.

It is worth noting that in the past two years, global central banks have been the main force in increasing their gold holdings, and the market is also paying attention to whether central banks of various countries will reverse the trend of buying gold under the circumstances of continued high gold prices. At the same time, the situation of the US election will also have a certain impact on gold.

Wang Qing, chief macro analyst of Eastern Jin Cheng, pointed out that the gold price is at a historical high, and the central bank's appropriate adjustment of the pace of increase in holdings is conducive to cost control. From the perspective of continuing to optimize the international reserve structure and steadily promote the internationalization of the renminbi, the central bank's subsequent increase in gold holdings is still a major direction.

In addition, according to the World Gold Council's survey report on global central bank gold reserves (CBGR) in 2024, more than 80% of the surveyed central banks expect the total amount of official gold reserves to continue to increase in the next 12 months. Reserve managers hope to use gold to reduce risks and prepare for the continuing uncertainty of global politics and economics.

Fan Shaokai, global central bank and Asia-Pacific regional head of the World Gold Council, also believes that affected by factors such as the gold price, central banks of various countries may slow down their pace of buying gold in the short term, but the overall trend has not changed, because central banks around the world have realized that gold plays a pivotal role as a strategic asset in the long run under the background of long-term uncertainty.