China's Central Bank Accelerates Gold Buying in August to Three-Year High, Adding Over 400 Tonnes in Recent Years

Data released by the People's Bank of China (PBoC) on the evening of September 7 showed that China's gold reserves stood at 76.73 million ounces (about 2,386.6 tonnes) at the end of August, up 650,000 ounces (about 20.2 tonnes) month-on-month. This marks the 22nd consecutive month of gold purchases, with the monthly increase reaching the highest level since October 2023. Based on the average international spot gold price of about $4,400 per ounce in August, the month's purchases were worth approximately $2.86 billion, the highest monthly purchase value since June 2015.

Since restarting gold purchases in November 2022, the central bank has cumulatively added 14.09 million ounces (about 438.3 tonnes) of gold, with an estimated total investment of about $34.8 billion. After a six-month pause from May to October 2024, purchases resumed in November 2024 at an undiminished pace and have accelerated markedly since March this year, with monthly purchases climbing from 160,000 ounces to 650,000 ounces in August - more than tripling in half a year.

As for where the gold is stored, according to a research report by CSC Financial, China follows a "domestic custody" model: the vast majority of its gold reserves are kept at home in central bank vaults in Beijing, Shanghai and other cities, with only a small portion held in custody at institutions such as the Bank for International Settlements for international transaction needs, reflecting a strategic orientation of keeping reserve assets independent and controllable.

China currently ranks fifth globally in terms of gold reserves, but gold still accounts for less than 10% of its foreign exchange reserves, significantly below the global average. Data show that by the end of 2025, gold accounted for 27% of global official reserves, surpassing U.S. Treasuries to become the largest reserve asset. By comparison, gold makes up more than 80% of foreign reserves in the United States and Germany, about 45% in Russia and about 18% in India.

Industry experts note that gold remains irreplaceable in the long run as a safe-haven, inflation-hedging and value-preserving asset with multiple financial and commodity attributes. Continued gold purchases by the People's Bank of China help diversify the foreign exchange reserve portfolio and safeguard the security and liquidity of China's FX reserves.