On September 7th, the State Administration of Foreign Exchange (hereinafter referred to as "SAFE") announced the foreign exchange reserve scale data at the end of August 2024. The data shows that as of the end of August 2024, China's foreign exchange reserve scale was 3,288.2 billion US dollars, an increase of 31.8 billion US dollars from the end of July, with an increase of 0.98%.

SAFE pointed out that in August 2024, influenced by factors such as macroeconomic data and monetary policy expectations of major economies, the US dollar index fell, and the global financial asset prices generally rose. The comprehensive effect of exchange rate conversion and changes in asset prices led to an increase in the foreign exchange reserve scale for the month.

Wen Bin, Chief Economist at Minsheng Bank, said in an interview with the Securities Daily reporter that in August, US inflation fell more than expected, and non-farm employment was less than expected. Federal Reserve Chairman Powell clearly released a rate cut signal at the annual meeting of the global central banks, indicating that he would pay more attention to the cooling labor market. The market once bet on a 50 basis point rate cut in September, which pushed the US dollar index to weaken and global asset prices to rise overall.

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Specifically, in August, in terms of exchange rates, the US dollar index fell by 2.3% to 101.7, and major non-US currencies all rose, with the yen, euro, and pound appreciating against the US dollar by 2.6%, 2.1%, and 2.1%, respectively. In terms of bond prices, the US dollar-denominated hedged global bond index rose by 1.1%, the 10-year US Treasury yield fell by 18 basis points month-on-month to 3.91%, and the 10-year Japanese government bond yield fell by 15 basis points month-on-month to 0.92%. In terms of stock prices, the S&P 500 stock index rose by 2.3%, and the EURO STOXX 50 price index rose by 1.4% month-on-month.

Looking ahead, SAFE stated that China's economy will continue to operate stably and maintain a positive development trend, which will support the basic stability of the foreign exchange reserve scale.

Wen Bin believes that China's export structure continues to improve, with the proportion of general trade steadily increasing, and the competitiveness of "new three items" and other products gradually strengthening. The policy dividends of free trade zones continue to be released, and new forms of foreign trade such as cross-border e-commerce and offshore trade continue to emerge. Multiple favorable factors support exports to maintain medium to high-speed growth, continuing to play a basic role in stabilizing cross-border capital flows. At the same time, as China's financial high-level opening continues to expand steadily, foreign institutional investors continue to be optimistic about China's capital market, and the amount of Chinese bonds held has reached a historical high, which also supports the stability of the foreign exchange reserve scale. In the next stage, China's economy will continue to rise and improve, which is a solid foundation for maintaining overall balance in the balance of payments, and is conducive to the basic stability of the foreign exchange reserve scale.

The gold reserve data released on the same day shows that as of the end of August 2024, China's central bank gold reserves were reported at 72.8 million ounces, unchanged from the end of July. So far, China's central bank gold reserves have remained unchanged for four consecutive months. In May of this year, China's central bank ended the previous "eighteen consecutive increases" in gold reserves, and the scale of gold reserves has always been maintained at 72.8 million ounces.

Wang Qing, Chief Macro Analyst at Orient Gold Credit, said to the Securities Daily reporter that the official gold reserve scale has remained unchanged in recent months because the current gold price is at a historical high. The appropriate adjustment of the central bank's gold purchase pace helps to control costs. Considering that the gold price will continue to operate at a high level above 2000 US dollars per ounce for some time, it is expected that the central bank will not resume gold purchases in the short term.

Li Chao, Chief Economist at Zheshang Securities, believes that the recent gold price has been greatly influenced by the decline in the US dollar index and US Treasury yield. In the medium and long term, global central banks will continue to increase gold hoarding, which will become a long-term support for gold prices, and gold still has a high value for allocation.