China’s central bank gold reserves hit a record high, but Poland remains the biggest buyer
Mon April 07 2025
The gold market is experiencing some solid selling pressure, but it continues to hold its ground at around $3,000 an ounce as the global economy tries to come to grips with the extreme volatility caused by President Donald Trump’s broad import tariffs.
Analysts note that gold has been caught up in broader market deleveraging due to fear that a global trade war will push the global economy into a recession; however, analysts also note that there is still solid value in the marketplace as central banks remain net buyers of gold.
China remains a key player in the marketplace, albeit its purchases have slowed in recent months. Over the weekend, the People’s Bank of China updated its reserve data, showing it bought another three tonnes of gold in March. This is the fifth consecutive month the central bank has increased its gold holdings after taking a six-month break last year.
Krishan Gopaul, senior European, Middle East, and Asian Market Analyst at the World Gold Council, commented in a post on social media that China’s central bank has purchased 13 tonnes of gold so far this year, bringing total reserves to 2,292 tonnes.
Commodity analysts at BMO Capital Markets noted that China’s gold reserves are at record levels.
“In USD terms, the share of gold in China’s total official reserve assets reached a record high at 6.5%, compared to 6.0% in the previous month and 4.6% a year ago,” the analysts said in a note.
Looking ahead, many analysts expect central banks to continue to diversify away from the U.S. dollar and into gold. Analysts have said that Trump’s trade war could quicken the pace of diversification.
“These tariffs have demonstrated that the U.S. has become an unreliable trade partner,” said Chris Vecchio, Head of Futures Strategies and Forex at Tastylive.com, in a recent interview with Kitco News.
David Miller, Portfolio Manager of GOLY and Chief Investment Officer at Catalyst Fund, said in a recent comment that he expects gold prices to remain elevated, both as an alternative to U.S. dollars and as an important portfolio diversifier.
“The U.S. dollar is no longer seen as a reliable reserve asset. Looking at the broader picture, the combination of deficit spending, tariffs, and pressures on smaller nations has fueled market uncertainty. Increased uncertainty typically leads to lower interest rates for Treasuries but also causes turbulence in equity markets,” he said. “Recently, we've seen heightened volatility and a meaningful decline in equities from their highs earlier this year. This underscores a fundamental question: What can people truly trust? The answer remains a physical metal, gold, which has preserved its value for thousands of years and has never been debased, unlike every currency in history.”
While China gets a significant amount of attention in the gold market, it is not the leading central bank for gold purchases. That designation belongs to Poland.
Gopaul noted in another social media post that Poland’s central bank bought 16 tonnes of gold last month.
“That increases its YTD net purchases to 49 tonnes, equivalent to 54% of its total purchases in 2024 (90 tonnes),” he said.
Meanwhile, some central banks from gold-producing nations are taking advantage of higher prices. Gopaul noted that the Central Bank of Uzbekistan sold 11 tonnes of gold last month, roughly matching its February sales.
“On a YTD basis, its gold reserves have fallen by 15 tonnes, to 368 tonnes,” he said.
Source: https://www.kitco.com/