18 Consecutive Months and Counting: China’s Central Bank Extends Gold-Buying Spree

The People’s Bank of China (PBOC) has now added gold to its reserves for 18 consecutive months, marking the longest sustained buying spree in modern Chinese monetary history. This strategic accumulation underscores Beijing’s broader push to diversify its foreign exchange reserves away from the U.S. dollar and bolster its economic sovereignty amid ongoing geopolitical tensions.

A Record-Breaking Buying Streak

According to official data released by the PBOC, the central bank’s gold reserves rose by approximately 10 tonnes in the latest reporting month, bringing total holdings to over 2,300 tonnes. This unbroken monthly purchasing pattern began in November 2022, following a prolonged pause that lasted over three years. The sustained pace of acquisitions signals a deliberate policy shift rather than a tactical adjustment.

The PBOC’s gold accumulation now surpasses its previous record of 10 consecutive months of net purchases set between 2018 and 2019. Central banks globally have been net buyers of gold since 2010, but China’s scale and consistency place it among the most aggressive state buyers in the world, alongside central banks from Russia, Turkey, and India.

Why China Is Buying Gold

Several factors drive Beijing’s gold accumulation strategy. First, gold acts as a hedge against currency depreciation and geopolitical risk. As tensions with the United States and its allies intensify over trade, technology, and territorial disputes, reducing reliance on dollar-denominated assets provides a layer of financial insulation.

Second, gold holdings enhance the credibility of the yuan as an international reserve currency. China has been actively promoting the yuan for cross-border trade settlement and central bank reserve allocation. A larger gold reserve supports this ambition by signaling long-term value stability.

Third, the PBOC likely views current gold prices as relatively attractive compared to the potential volatility in bond markets, particularly U.S. Treasuries. With interest rate cycles shifting globally, gold offers a non-yielding but stable store of value that is not subject to counterparty risk.

Global Market Implications

China’s sustained buying has been a significant driver of gold prices, which have traded near record highs above $2,400 per ounce in recent months. Analysts at the World Gold Council estimate that central bank purchases accounted for roughly 25% of total global gold demand in 2023, with China representing a substantial portion of that figure.

This demand has provided a floor under gold prices even as retail and institutional investor interest fluctuates. Should China continue its buying spree through 2025, it could further tighten the physical gold market, pushing prices higher and squeezing supply for other buyers.

Conclusion

The PBOC’s 18-month gold-buying streak reflects a deliberate and long-term strategy to reshape China’s reserve composition, enhance financial sovereignty, and support the yuan’s international ambitions. For global markets, it signals sustained demand from the world’s second-largest economy, with implications for gold prices, currency dynamics, and geopolitical financial strategies. As the buying spree continues, the question is not whether China will stop, but how high its gold holdings will go before the strategy shifts.

FAQs

Q1: How much gold has China’s central bank bought over the past 18 months?
The PBOC has added approximately 280 to 300 tonnes of gold to its reserves since November 2022, based on monthly official data releases. The exact figure varies slightly due to rounding in reporting.

Q2: Why does China prefer gold over U.S. Treasury bonds?
Gold offers a hedge against geopolitical risk and currency depreciation, is not subject to sanctions or freezes, and supports China’s goal of reducing reliance on the U.S. dollar in international finance. Unlike Treasuries, gold carries no counterparty risk.

Q3: Could this gold-buying spree end soon?
While no official end date has been announced, analysts suggest the PBOC may slow purchases if gold prices rise too sharply or if China’s reserve diversification goals are met. However, the current geopolitical environment suggests continued accumulation is likely in the near term.