PBOC's August Gold Purchases Hit 650,000 Ounces, Largest in Nearly Three Years

Tue Sep 08 2026

The People's Bank of China added 650,000 ounces of gold to its reserves in August, the largest monthly increase since October 2023—a span of roughly two years and ten months. Gold purchases have now continued for 22 consecutive months, with the pace accelerating since March. Total gold holdings reached 76.73 million troy ounces at the end of August, valued at $350.08 billion. China has continued buying even as gold prices trade above $4,000 per ounce, underscoring resilient long-term demand. In the near term, however, firm U.S. employment data has revived rate-hike expectations, creating headwinds for the metal. Analysts view the $4,300 level as a critical support line.

The People's Bank of China (PBOC) added the largest amount of gold to its reserves in August since October 2023. Even as gold prices hover near historic highs, the central bank has not slowed its buying pace, making it increasingly clear that gold's presence in China's foreign exchange reserves is steadily growing.

According to data released by the PBOC on the 7th, gold holdings stood at 76.73 million troy ounces at the end of August, up 650,000 ounces from 76.08 million troy ounces at the end of July. The increase equates to approximately 20.2 metric tons, slightly exceeding July's 640,000 ounces. As a monthly increase, it was the largest since October 2023, when the bank added 740,000 ounces—a gap of roughly two years and ten months.

Gold purchases have now continued for 22 consecutive months. Since the PBOC added 160,000 ounces in March, the pace of buying has accelerated in stages, with June's increase at 480,000 ounces. The latest 650,000-ounce addition represents a more than fourfold expansion from levels seen at the start of the year.

The valuation of gold reserves has also swelled significantly. From $306.35 billion (approximately ¥47 trillion) at the end of July, the value rose to $350.08 billion (approximately ¥53.7 trillion) by the end of August—an increase of roughly $43.7 billion in a single month. In addition to new purchases, rising gold prices boosted the valuation.

Gold prices climbed 9.7% in August, the largest monthly gain since January. A weaker dollar, falling U.S. Treasury yields, and safe-haven demand supported prices. However, toward the end of the month, Federal Reserve Chair Warsh struck a hawkish tone, reigniting expectations of U.S. rate hikes and exerting downward pressure on gold.

 China Keeps Buying Above $4,000

It is particularly noteworthy that China has continued purchasing gold even after prices climbed above $4,000 per troy ounce (approximately ¥610,000). According to World Gold Council (WGC) data, China added roughly 60 metric tons over the seven months through 2026, making it the second-largest official central bank buyer after Poland. Official gold holdings at the end of July stood at approximately 2,366 metric tons, accounting for about 8% of total foreign exchange reserves. August's additional purchases have further expanded that figure.

China's gold buying was especially aggressive in 2023, with multiple months exceeding 20 metric tons. Purchases then declined sharply in 2024 and remained relatively modest through 2025 and early 2026. However, the situation has shifted dramatically in recent months, with monthly purchases rising in stages from around 5 metric tons to 8, 10, 15, and finally to roughly 20 metric tons in July and August.

The fact that China has not eased its buying despite gold prices more than doubling from below $2,000 (approximately ¥310,000) in early 2023 to above $4,000 serves as important evidence that the country's long-term gold demand remains robust. That said, China's purchases alone do not determine gold prices. There were periods when gold prices continued rising even as purchases slowed substantially, indicating that the relationship between the two is not mechanical.

 Near-Term Headwinds and Technical Analysis

Gold traded around $4,395 (approximately ¥670,000) in Asian hours on September 7, down about 1% from the prior week's close, dipping below $4,400 (approximately ¥670,000). The move came as firm U.S. employment data strengthened expectations that the Fed would maintain monetary tightening or move to hike rates again. Since gold is a non-interest-bearing asset, rising rate expectations generally act as a headwind. Markets are now closely watching upcoming U.S. inflation indicators for clues on the Fed's next move.

Additionally, the day marked the U.S. Labor Day holiday, with the New York Stock Exchange and Nasdaq closed. Price movements during holiday-thinned trading tend to be less reliable due to reduced participation. A break below $4,400 does not necessarily signal the start of a sustained decline, nor does a sharp recovery above $4,400 automatically mean bulls have regained control. More meaningful signals are likely to emerge once U.S. markets return to normal trading and positioning ahead of this week's inflation data intensifies.

Analyst Rashad Hajiyev interprets the current gold weakness within a bullish context. In his view, gold is in a consolidation phase before its next leg higher, with the $4,300 level (approximately ¥660,000) serving as a key support line. Gold previously broke out of a large trading range between $4,000 and $4,200 (approximately ¥610,000–¥640,000) and rallied to around $4,700 (approximately ¥720,000).

Recent price action has been volatile: gold fell toward $4,300, rebounded to $4,500 (approximately ¥690,000), and then returned to around $4,395. Hajiyev's projected path allows for another test of the $4,300 area, followed by a recovery. The 200-day moving average currently sits near $4,350 (approximately ¥670,000), aligning closely with his support zone and serving as a key long-term technical level.

If buyers successfully defend the $4,300–$4,350 zone, the current decline may prove to be part of a larger consolidation. In his bullish scenario, gold would move through $4,500 and retest $4,650–$4,700 (approximately ¥710,000–¥720,000), ultimately targeting $4,750–$4,800 (approximately ¥730,000–¥740,000). Conversely, a decisive break below $4,300 would deepen the correction, opening the door to $4,200 (approximately ¥640,000) and, if selling accelerates, a test of $4,000–$4,100 (approximately ¥610,000–¥630,000).

 Implications for the Gold Market

China's accelerating purchases reinforce gold's long-term bullish case while doing little to eliminate near-term risks. The immediate focus centers on the battle between $4,300 and $4,700.

The base-case scenario envisions gold holding the $4,300–$4,350 range, consolidating for a period, and then attempting another push toward $4,600–$4,700 (approximately ¥710,000–¥720,000). In a bullish scenario, gold would decisively break through $4,700, clear $4,800 (approximately ¥740,000), and then challenge the psychological milestone of $5,000 (approximately ¥770,000). In a bearish scenario, $4,300 would give way, opening a deeper correction toward $4,100–$4,200 (approximately ¥630,000–¥640,000).

Ongoing central bank gold purchases worldwide are also tightening medium- to long-term supply-demand dynamics. China's latest purchase data reaffirms that central banks remain committed to diversifying their foreign exchange reserves even at elevated gold prices.

Source: https://finance.biggo.com/