Spot gold (XAUUSD:CUR) fell 1.5% on Friday following reports that the People’s Bank of China paused their purchases in May after 18 months of continuous buying, while silver shed more than 2% even as the U.S. dollar weakened.
Bullion held by the People’s Bank of China was unchanged at 72.80 million troy ounces in May, according to data released Friday. China is the world’s biggest consumer of the precious metal.
China, a major driver behind gold’s rally in the past year, is nowhere near done buying gold, but the pause also highlights they are balking at the prospect of paying record prices, Saxo Bank’s Ole Hansen said. “Overall, gold is still consolidating, and the news will likely prolong that phase, but overall the long-term bullish outlook has not changed.”