China’s gold purchases, primarily led by the People’s Bank of China (PBOC), represent one of the most aggressive central bank accumulation strategies in modern history.
Since resuming buying in late 2024 after a brief pause, the PBOC has added gold to its reserves for 11 consecutive months through September 2025, contributing to the precious metal’s surge past $4,200 per ounce.
This isn’t speculative investing but a deliberate effort to diversify away from U.S. dollar dominance, hedge against geopolitical risks, and bolster the yuan’s global role.
China’s official gold strategy kicked into high gear in 2023, when the PBOC became the world’s largest central bank buyer with 225 tonnes added that year. This was followed by 44 tonnes in 2024 despite a six-month pause mid-year due to high prices and at least 21 tonnes in 2025 through September.
As of Q2 2025, official reserves stood at 2,298.53 tonnes, valued at around $243–$254 billion depending on monthly fluctuations, representing about 5.9–6.5% of China’s total foreign exchange reserves over $3.5 trillion.
However, analysts widely suspect the true holdings are much higher—potentially 3,000–4,000 tonnes or more—due to unreported purchases via state entities, imports not funneled through official channels, and storage in Shanghai’s bonded warehouses.
China has been quietly accumulating since at least 2014, with physical flows data showing consistent inflows that exceed reported figures. For context, this puts China as the sixth-largest official holder globally, but its actual stash could rival or exceed top holders like the U.S. (8,133 tonnes) or Germany (3,352 tonnes).
Reasons for the Purchases
China’s strategy is multifaceted, driven by economic pragmatism and geopolitical maneuvering: Diversification from the U.S. Dollar: With ~59% of reserves in USD as recently as 2016, China has slashed that to ~25% by 2025, redirecting into gold, euros, and yuan-denominated assets.
Western sanctions on Russia’s $300 billion in reserves half frozen in 2022 exposed the risks of dollar reliance. Gold offers “financial sovereignty”—it’s tangible, non-freezable, and hedges against currency devaluation or U.S. fiscal woes like the October 2025 government shutdown.
Escalating U.S.-China trade tensions— including 100% tariffs on imports announced for November 2025—have amplified safe-haven demand. Gold protects against inflation, supply chain disruptions, and yuan volatility.
The PBOC views it as a “low-risk asset” for portfolio stability, especially as global multipolarization accelerates (e.g., BRICS nations storing gold in Shanghai).
Boosting gold reserves enhances the yuan’s credibility as a reserve currency. With 40+ bilateral swap agreements and $14 billion in digital yuan trials by mid-2025, China is wooing allies to trade and store gold via the Shanghai Gold Exchange (SGE).
Warrants on the SGE alone imply ~47,000 tonnes in potential physical backing, signaling massive institutional involvement. Unlike retail investors, central banks like the PBOC buy steadily regardless of highs adding 0.16 million troy ounces in February 2025 at record prices.
This reflects a “strategic direction” rather than opportunism, with projections for continued accumulation amid a volatile global outlook. China’s buying has been a key driver of the 2025 rally.
Official imports hit 270 tonnes in Q4 2024 and 84 tonnes in December alone. Combined with retail (e.g., 30% YoY rise in gold bars/coins in Q1 2025), it absorbed supply, pushing prices up 27% YTD.
Global central banks led by China, Poland, India are on track for 1,000 tonnes in 2025—the fourth straight year—above the five-year average of 600–700 tonnes. A World Gold Council survey shows 95% of central banks expect further increases over the next year.
On X, discussions highlight the “silent monetary coup,” with users noting unreported buys and links to tariff responses (e.g., China selling Bitcoin for gold). Analysts warn of a “calculated siege” on dollar hegemony, potentially stabilizing gold above $4,000.
In short, China’s gold purchases are less about short-term gains and more about long-game resilience. With room to grow gold is still just ~6% of reserves vs. 20% targets elsewhere, expect the streak to continue—fueling upside for gold amid trade wars and dedollarization. If tensions ease, though, a tactical pause isn’t off the table.
