(Yicai) March 8 -- Gold reserves held by China's central bank rose for the 16th straight month in February, as prices of the safe-haven asset reach new highs.

The People’s Bank of China had nearly 72.6 million ounces of gold as of Feb. 29, an increase of 390,000 ounces from a month earlier, the State Administration of Foreign Exchange announced yesterday.

The PBOC started to raise its gold holdings in November 2022, and since then, they have jumped by 9.9 million ounces. 

Prices of the precious metal have broken records this week. The spot price topped USD2,171 an ounce in London today, a more than 6 percent increase so far this month.

Prices have soared recently mainly because the US Federal Reserve is expected to loosen liquidity, and US bond rates have fallen, driving up the demand for gold, Everbright Securities wrote in a research report published yesterday.

International geopolitical conflicts and rising demand for safe-haven assets have promoted central banks to hike their holdings of gold, supporting price increases in the mid to long-term, the broker’s report added.

China’s foreign exchange reserves jumped by USD6.5 billion to USD3.23 trillion in late February from a month earlier, due to changes in asset prices and currency rates, the SAFE also said. Before that, forex reserves had fallen by USD18.7 billion as of Jan. 31 from Dec. 31.

Editor: Emmi Laine