(Yicai) Aug. 8 -- China increased its gold reserves in July for the ninth month in a row despite the recent slight drop in the precious metal's price from a record high, while the country's foreign exchange reserves fell due to the appreciation of the US dollar.

The People's Bank of China increased its holdings of gold by 60,000 ounces to 73.96 million ounces last month from June, according to data released by the State Administration of Foreign Exchange yesterday. By value, China's gold reserves rose by about USD1 billion to USD244 billion.

Since last November, China's central bank has bought 1.16 million ounces of gold.

International trade frictions have cooled recently, with the weakening of demand for safe-haven assets leading to an adjustment in gold prices, which remains at a high level, Wang Qing, chief macro analyst at Golden Credit Rating International, told Yicai.

New variables emerged in the global political and economic environment after Donald Trump took over as president of the United States, making the price of gold more likely to rise than fall, Wang noted, adding that there is no need for the PBOC to stop increasing its holdings.

Affected by the uncertainty of US tariff policy, international gold prices exceeded the historic high of USD3,500 per ounce on April 22 and have since fluctuated in the USD3,100 to USD3,500 range. The price was around USD3,400 per ounce today.

Gold accounts for about 7 percent of China's official reserves, significantly lower than the global average of 15 percent, Wang said. From the perspective of optimizing the structure of reserve assets, the main direction remains to expand gold holdings and moderately reduce US bonds, Wang pointed out.

China's foreign exchange reserves came in at USD3.3 trillion at the end of last month, down about USD25.2 billion from the end of June, mainly affected by exchange rates and asset price changes, the State Administration of Foreign Exchange noted on the same day.

The US Dollar Index, a measure of the greenback's value relative to a basket of other currencies, rose 3.4 percent in July, ending a five-month downward trend after the country reached trade agreements with many nations, Wang said. This led to non-dollar assets in forex reserves to relatively depreciate, Wang pointed out.

Editors: Dou Shicong, Martin Kadiev