_{ECONOMIC NEWS}

China Continues Gold-Buying Streak, Acquiring Massive Amounts for 16 Consecutive Months

China's gold-buying spree has continued for 16 consecutive months, with the People's Bank of China adding approximately 390,000 troy ounces in February, bringing its total holdings to 72.58 million troy ounces or around 2,257 tons. Gold prices have reached a record high of $2,161.90 in New York, reflecting a 5.25% increase over the last five days and an 18.77% rise over the past 12 months. The World Gold Council reported that central banks purchased 1,037 tons of gold in 2023, just shy of the all-time record set in 2022. Central bank purchases have contributed to the rally in gold prices, with expectations of rate cuts from the Federal Reserve also fueling gains.

China's accumulation of gold aligns with its efforts to diversify its holdings and reduce its reliance on the US dollar. As part of the BRICS economic bloc, China shares the ambition to challenge the global dominance of the greenback. Demand for gold in China remains high, as evidenced by the nearly tripled volume of Swiss exports to the country in January. This surge in gold buying occurs amidst uncertainty in China's stock market, economy, and property sector.

Historically, gold is sought after as a safe-haven asset during economic turmoil or inflation. However, Bank of America strategists have noted that gold is currently the most overbought since March 8, 2022, suggesting that price momentum may slow or prices may dip in the near future. Read More.

_{FINANCIAL 101}

Understanding Central Bank Digital Currencies (CBDCs)

A Central Bank Digital Currency (CBDC) is a digital form of a country's fiat currency issued by its central bank. CBDCs aim to promote financial inclusion, simplify monetary and fiscal policy implementation, and enhance the efficiency of financial systems. Unlike cryptocurrencies, which are decentralized and volatile, CBDCs are government-backed, stable, and designed to mirror the value of fiat currency. There are two types of CBDCs: wholesale (used by financial institutions) and retail (used by consumers and businesses). CBDCs address issues such as financial inclusion, cross-border payment costs, and monetary policy implementation while creating challenges related to financial structure changes, system stability, privacy, and cybersecurity. As of March 2023, 11 countries have implemented CBDCs, with several others exploring their potential through pilot programs and research projects. The U.S. is currently researching CBDCs but has not implemented one yet. Read Now.