China expands Gold reserves for a second month

China’s central bank extended its gold acquisition streak in December, underscoring a strategic push to fortify reserves amidst fluctuating global economic conditions.

The People’s Bank of China (PBOC) increased its holdings to 73.29 million fine troy ounces, adding 330,000 ounces compared to the previous month, data revealed on Tuesday. This marks the second consecutive month of purchases following a pause earlier in the year.

The renewed appetite for gold comes as central banks globally continue diversifying reserves to reduce reliance on traditional assets like the U.S. dollar. Despite elevated gold prices driven by market volatility in 2024, China’s commitment to accumulating the metal remains firm. Gold reached historic highs last year, buoyed by monetary easing in the United States, geopolitical uncertainties, and central bank buying worldwide.

However, a stronger U.S. dollar following Donald Trump’s re-election tempered the rally. Analysts at Goldman Sachs revised their forecast for gold prices to hit $3,000 an ounce in 2026, citing expectations of a less aggressive Federal Reserve easing cycle in 2025.

Eurozone inflation hits five-month high at 2.4%

Inflation in the Eurozone accelerated to 2.4% in December, marking its highest level since July, according to preliminary data released Tuesday. The annual rate rose from 2.2% in November, as the impact of last year’s energy price slump faded from calculations.

Core inflation, which excludes volatile items like energy and food, remained unchanged at 2.7%, suggesting underlying price pressures persist. The data aligns with the European Central Bank’s (ECB) outlook, which anticipates a return to the 2% target by late 2025.

December’s inflation spike highlights the lingering effects of the Eurozone’s earlier energy crisis and the challenges facing policymakers as they navigate a delicate balance between curbing inflation and supporting economic growth.