(Yicai) Oct. 9 -- China increased its gold reserves for the 11th consecutive month in September, though the country's central bank slowed the pace of buying from previous months.

The People's Bank of China raised its gold holdings by 40,000 ounces to 74.06 million oz last month from August, the State Administration of Foreign Exchange announced on Oct. 7, easing the rate of purchases from 60,000 oz in each of August and July and 70,000 oz in each of the four months prior to that.

The steady accumulation of the precious metal reflects the PBOC's approach of balancing multiple objectives, Pang Ming, senior researcher at the National Institute for Finance and Development, told Yicai. The bank is optimizing its reserve structure while controlling the cost of purchases so as to better manage portfolio liquidity as well as hedge against geopolitical uncertainty and volatility in other types of financial assets, he added.

The price of gold breached USD4,000 per ounce for the first time yesterday, after climbing above USD3,000 in March as investors seek a safe haven amid global economic uncertainty.

In the medium term, central banks and investors around the world are likely to keep increasing their gold holdings, as investment and safe-haven demand continue to support prices, Pang said. The PBOC will go on diversifying its reserves and adjusting its gold holdings as needed, while maintaining its long-term strategy of steadily increasing reserves of the metal. he added.

China's foreign exchange reserves rose by USD16.5 billion to USD3.3387 trillion as of Sept. 30 from Aug. 31, marking the second straight month above USD3.3 trillion and topping the previous record set in December 2015, the SAFE data also showed. But the increase slowed to 0.5 percent last month from 0.9 percent the month before.

The uptick was mainly driven by higher global financial asset prices, according to analysts. Last month, global stock indexes climbed and US Treasury bond prices jumped, boosting the value of China's investments in overseas financial assets, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating.

The impact of the US dollar’s depreciation on the value of China’s reserves weakened in September, with the US Dollar Index declining just 0.03 percent from August. This contributed to the slower growth in China's forex reserves in the period, Wang explained.

Editor: Futura Costaglione