PBOC Steps Up Gold Buying to the Most Since Resuming Purchases, Extending Streak to 23 Consecutive Months

On October 7, central bank data showed that China's gold reserves stood at 77.47 million ounces at the end of September, an increase of 740,000 ounces from the previous month. This marked the 23rd consecutive month of gold purchases since the People's Bank of China resumed increasing its holdings in November 2024.

Gold prices have been increasingly volatile this year. In September, London gold and COMEX gold both closed lower, each falling 6.52% for the month and ending two consecutive months of gains. Against this backdrop, the central bank sharply increased its holdings by 740,000 ounces in September, the largest monthly increase since it resumed buying gold in November 2024.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating, said that, on one hand, as of the end of 2025 gold reserves accounted for about 8.8% of China's official international reserves, while gold accounted for 27% of all reserve assets held by central banks worldwide, meaning China's gold reserve share is clearly low and the necessity of increasing gold holdings has risen from the perspective of optimizing the international reserve structure. On the other hand, gold is a widely accepted final means of payment globally, and central bank purchases of gold can enhance the credibility of the sovereign currency and create favorable conditions for steadily advancing renminbi internationalization.

"Judging from all factors, continued central bank gold purchases remain the general direction," Wang said.

Survey data from the World Gold Council also show that global central bank demand for gold is still rising. Among respondents, 45% of reserve managers expect their institutions to increase gold reserves over the next 12 months, a record-high proportion that underscores gold's important long-term and stable role in official reserves.

On foreign exchange reserves, as of the end of September 2026 China's foreign exchange reserves stood at $3.4003 trillion, down $38.1 billion, or 1.11%, from the end of August.

SAFE said that in September 2026, affected by the global macroeconomic environment and monetary policy in major economies, the US dollar index rose while prices of major global financial assets fell overall. Exchange rate conversion and changes in asset prices worked together to reduce the month's foreign exchange reserve scale. China's economy has been generally stable, with new growth drivers and an improving structure, and high-quality development has produced new results, which is conducive to keeping the foreign exchange reserves basically stable.

Looking ahead, Wen Bin, chief economist at China Minsheng Bank, believes exports will remain highly resilient and serve as the cornerstone of the balance of payments. On one hand, global AI capital expenditure remains at a high level, with strong demand for chips, servers and related supporting products; on the other hand, in September China and the United States reached consensus on a framework for reciprocal tariff reductions covering $30 billion of goods, under which more than 90% of products will be exempted from all mutually imposed additional tariffs and have most-favored-nation rates restored. US tariff cuts are concentrated in consumer goods such as toys, home appliances, baby products, kitchen and bath items and holiday gifts, which helps improve exports of labor-intensive products. At the same time, export market diversification and supply chain advantages will continue to provide long-term support for exports.

On cross-border capital flows, policies to open up the financial sector continued to advance in September. Since September 14, multinational companies' domestic and foreign currency cross-border cash pooling business has been implemented nationwide, further improving multinationals' cross-border capital allocation efficiency and investment and financing convenience by unifying the management of domestic and foreign currency funds and optimizing cash collection and cross-border receipt and payment arrangements. The People's Bank of China held a symposium with foreign financial institutions in September, making clear that it will continue to steadily expand the two-way opening of financial markets, optimize cross-border payment services and facilitate the international use of the renminbi. All these policies help increase the appeal of renminbi assets to international investors.

"On the whole, China's economy has been generally stable, with new growth drivers and an improving structure, and high-quality development has produced new results, providing support for keeping the foreign exchange reserves basically stable," Wen said.