China’s central bank extends gold-buying spree for eighth straight month
&imwidth=600&imheight=450&format=webp&quality=medium "China’s central bank extends gold-buying spree for eighth straight month")
Headquarters of the Peoples Bank of China (PBOC), the central bank, is pictured in Beijing, China Photograph: (Reuters)
China extended its gold buying streak in June, reinforcing its strategy to diversify reserves and hedge against dollar risks amid global uncertainty.
China’s central bank continued to bolster its gold reserves in June, extending a buying streak that underscores Beijing’s strategy to reduce reliance on the US dollar and strengthen its financial resilience. According to Bloomberg, the People’s Bank of China (PBOC) added 70,000 troy ounces of gold to its official reserves last month. This marks the eighth consecutive monthly increase, bringing total purchases since November to about 1.1 million troy ounces, or roughly 34.2 metric tons.
Building reserves as prices hover near record highs
The sustained buying comes as global gold prices have traded near historic highs. Year to date, gold has risen more than 25 per cent, supported by robust central bank demand, safe-haven flows linked to geopolitical tensions in the Middle East, and uncertainty surrounding US trade and economic policy.
While June saw gold prices stabilise after earlier gains, analysts suggest ongoing purchases by official institutions, including the PBOC are likely to provide a floor for prices in the months ahead, as per Bloomberg.
Diversifying away from the dollar
China’s appetite for gold reflects a long-running effort to diversify its foreign exchange reserves away from dollar-denominated assets. According to Bloomberg, the PBOC had paused gold buying for six months before resuming acquisitions in November, ending what had been an 18-month buying spree that started in 2024.
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This renewed push highlights Beijing’s concern over the sustainability of US fiscal policy and the perceived long-term weakening of the dollar.
Part of a global central bank trend
China is not alone in boosting gold holdings. Central banks worldwide have been buying bullion at elevated levels, viewing it as a hedge against currency volatility, inflation, and geopolitical risk.
Bloomberg notes that these official-sector purchases have been a key driver of gold’s rally this year, even as other factors such as investor demand and safe-haven buying also play a role.
Outlook remains firm despite price consolidation
Though gold prices showed signs of levelling off in June, many analysts expect steady central bank demand, including from China to continue supporting the market.
Persistent worries about the global economic outlook, tensions in the Middle East, and trade frictions driven by US President Donald Trump’s policy stance are all contributing to a cautious environment where gold remains an attractive reserve asset.
(With inputs from the agencies)