By the end of February, both the scale of foreign reserves and Gold reserves have slightly increased. With high gold prices, experts remind to weigh profits against risks.
① As of the end of February, China's Forex reserves amounted to 3,227.2 billion USD, an increase of 18.2 billion USD compared to the end of January. The decline in the USD roughly drove the rise in the prices of non-USD assets in China's foreign reserves by about 10 billion USD; ② At the end of February, the People's Bank of China held 73.61 million ounces of Gold, an increase of 0.16 million ounces compared to the end of January.
In February, China's Forex reserves increased, and the central bank expanded its Gold reserves for four consecutive months.
As of the end of February, China's Gold reserves were 73.61 million ounces, an increase from 73.45 million ounces at the end of January, showing a growth of 0.22%. As of the end of February 2025, China's Forex reserves stood at $3227.2 billion, an increase of $18.2 billion from the end of January, representing a growth of 0.57%.
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The "gold bar" Trade in the USA has nearly stopped, with a significant narrowing of the price difference between COMEX and London futures.
Currently, the USA Gold reserves have reached a four-year high, and the ample inventory has reduced arbitrage opportunities; however, the high storage costs in New York may lead to Gold flowing back to London or other areas.
USA's rush for Gold has created an 'economic panic'?
Goldman Sachs pointed out that in January, the gold import amount was about 25 billion USD, almost accounting for the entire expansion of the USA trade deficit of 31 billion USD, which has a significant distorting effect on trade data and leads the market to be not bullish on the first quarter GDP growth. Moreover, this portion of imports is usually excluded from GDP calculations, so there is no need for the market to be overly pessimistic.
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