China stretched its gold-buying spree into the 7th straight month in May, signaling more central bank de-dollarization

• China extended a gold-buying streak through May, adding an additional 16 tons.

• It’s not alone in boosting its gold holdings, as central banks shed dollar reserves.

• China’s foreign currency holdings fell in May to $3.18 trillion.

Heightened central bank demand for gold has yet to abate as China amassed more of the yellow metal in May, Bloomberg reported, stretching its buying spree into the seventh month.

The country’s central bank purchased 16 tons of the reserve commodity last month, continuing a trend started in November. Through the preceding six months, China acquired 144 tons of gold, and has now amassed 2,092 tons.

China is not the only country boosting demand for the precious metal. The World Gold Council previously reported a massive uptick in purchases through last year; in the first quarter of this year alone, central banks bought 228.4 tons of gold, notching a new quarterly record.

Foreign efforts to boost stockpiles of the metal follow a growing move away from the US dollar as a reserve currency.

That movement picked up pace after the greenback became weaponized against Russia in the wake of the Ukraine invasion, a punitive measure that pushed other countries to rethink their reliance on the US currency.

According to a WGC survey from May, half of central banks expect the dollar’s share of reserves to continue sliding, accounting for 40-50% in the next five years. Meanwhile, gold is forecasted to rise over the same time period.

The same survey found that a quarter of central banks intend to add to their gold holdings over the next year.

China ended May with $3.18 trillion in foreign currency reserves, compared with April’s $3.20 trillion, data from the People’s Bank of China showed.

In the first quarter, it was the second largest buyer of gold, following Singapore.

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