China's central bank keeps buying as Golden Week ends

Key points

• The People's Bank of China added gold for a 22nd straight month in August, taking holdings to 2,387 tonnes
• August's 650,000-ounce addition was its largest monthly purchase since October 2023
• FX Leaders reports a 23rd month in September, to 77.47 million ounces
• Spot gold near $4,104 equals about 885 yuan a gram as the Golden Week holiday ends

China's central bank is still buying gold, even after prices fell sharply in September. The People's Bank of China raised its holdings for a 22nd consecutive month in August, to 2,387 tonnes, the World Gold Council said. Gold now makes up about 9% of China's foreign exchange reserves.

Why it matters: Steady buying by the world's second-largest economy puts a floor of demand under the market and signals that Beijing wants less of its reserves in US dollars. Chinese buyers see that as a vote of confidence in gold.

The numbers

In August the PBOC added 650,000 troy ounces, taking its reported holdings to a record 76.73 million ounces, Central Banking reported. That was the largest monthly increase since October 2023.

September's figure appears to extend the run. FX Leaders reported on 7 October that holdings rose to 77.47 million ounces, a 23rd straight monthly increase. That would be a gain of about 740,000 ounces, or roughly 23 tonnes. The desk has not yet matched that figure to the official reserve release.

Sources: Central Banking, FX Leaders. July is derived from the August change.

The site's reserves table, drawn from World Gold Council data, also shows China among the four largest official buyers in the second quarter, with 33 tonnes, behind Poland's 51 tonnes.

The pace has picked up as prices rose and fell. Bloomberg noted in September that the August purchase was the largest since 2023 even though prices had jumped, which suggests the bank is following a plan rather than only buying on dips.