China’s central bank refrained from gold purchases to its reserves for a second consecutive month in June, official data showed on Sunday.

The pause by the People’s Bank of China (PBOC) started in May, when spot gold prices hit a record high.

The previous 18 months of consistent buying by the PBOC, along with demand from other central banks, contributed to the gold rally from March to May.

China held 72.80 million troy ounces of gold at the end of June, unchanged from the end of May, the data showed.

The value of China’s gold reserves fell to $169.70 billion from $170.96 billion.

“It appears that gold prices remain a little too high and the PBOC is waiting for a further pullback before resuming its gold purchasing programme,” said Nitesh Shah, a commodity strategist at WisdomTree.

Demand for gold from central banks has been elevated in the past two years as several countries diversify their foreign currency reserves.

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The PBOC was the largest official sector buyer of gold in 2023, with its biggest additions since at least 1977.

“Our models indicate that we may get a 7% pullback in gold prices this quarter, setting up a perfect opportunity for the PBOC to acquire more gold,” Shah said.

“But it will have to be quick as the metal is likely to rally to all-time highs once again shortly after.”