The People's Bank of China has suspended its increase in gold holdings for the fourth consecutive month as gold prices hit a historic high.

According to official data, as of the end of last month, the amount of gold held by the People's Bank of China remained unchanged at 72.8 million ounces. Previously, the People's Bank of China had increased its holdings of gold reserves for 18 consecutive months until April this year, which also supported the strong trend of gold prices to some extent.

However, the value of gold reserves increased from $176.64 billion at the end of July to $182.98 billion.

The decision of the central bank to suspend gold purchases indicates that global central bank demand is being suppressed due to soaring prices, especially after a large amount of purchases in the first half of this year. However, despite this, some analysts still believe that central bank gold purchases will continue to be a key factor supporting gold prices this year.

This year, due to market speculation that the United States is about to cut interest rates and the need for safe haven driven by geopolitical and economic uncertainty, gold prices have been rising, and global central banks have also made large purchases. As of now, the gold price has risen by 21% this year and is hovering around a historical high of $2531.6 on August 20th.

Although high gold prices have recently hit retail sales of non essential items such as jewelry in China, gold bars and coins are becoming increasingly popular among investors as they hope to protect their wealth in the context of economic weakness.

The People's Bank of China is the world's largest single gold buyer in 2023, and its decision to suspend purchases has weakened demand from Chinese investors in recent months. Carsten Menke, an analyst at UBS, said that despite the high price, the People's Bank of China is expected to resume buying gold at some point due to political motives - such as reducing dependence on the US dollar as a reserve asset - rather than economic motives.