China’s Central Bank Adds Gold for Eighth Straight Month as Reserves Climb to 2,298 Tonnes
China continued its gold accumulation streak in June, with the People’s Bank of China (PBOC) adding 70,000 troy ounces (approx. 2.18 tonnes) to its reserves, marking the eighth consecutive month of purchases. Since resuming gold buying in November 2024, the PBOC has increased its holdings by 1.1 million ounces (34.2 tonnes), bringing total reserves to 73.9 million ounces (2,298.55 tonnes) by the end of June.
Strategic Accumulation Amid Record-High Gold Prices
Gold prices have surged over 25% year-to-date, buoyed by heightened safe-haven demand amid escalating Middle East tensions and U.S. President Donald Trump’s aggressive trade policies. Although prices stabilized in June, central bank buying—particularly from China—remains a key market support.
The PBOC’s latest buying spree follows a six-month pause in 2024, which interrupted an 18-month accumulation cycle. Analysts view this sustained purchasing as both a hedge against global monetary instability and a deliberate move to reduce reliance on dollar-denominated assets.
Diversification Away from the Dollar
With U.S. federal debt surpassing $40 trillion as of July 2025, concerns over fiscal sustainability have eroded confidence in dollar reserves. China’s gold diversification strategy dates back to 2015, when it shocked markets with a 50% reserve increase. While gold still accounts for less than 7% of China’s total reserves, its steady accumulation reflects long-term planning for a more balanced reserve portfolio.
Global Central Banks Follow Suit
The World Gold Council reports that central banks globally added 244 tonnes of gold in H1 2025, with emerging economies like Turkey and India leading the charge. Despite Western sanctions on Russian gold, market liquidity remains robust—London Bullion Market Association data shows a 12% year-on-year rise in daily gold trading volumes in June, underscoring deep institutional demand.
Gold’s Role in China’s Financial Strategy
For China, expanding gold reserves serves dual purposes: insulating against dollar volatility and bolstering the yuan’s credibility in international markets. At 2,298 tonnes, China retains its position as the world’s sixth-largest gold holder.
Market analysts anticipate continued PBOC purchases, especially with Fed rate cuts looming and geopolitical risks elevated. J.P. Morgan projects that gold could exceed 7% of China’s reserves by year-end, further strengthening the safety buffer of its foreign assets.
Source: https://nai500.com/