China's Central Bank Buys Record Amount of Gold in August
The People's Bank of China added 650,000 troy ounces (about 20 tonnes) to its gold reserves in August, marking the largest monthly purchase since 2023 and extending a buying streak to 22 consecutive months. This brings total holdings to 76.73 million troy ounces. The increase in value of China's gold reserve is attributed more to rising gold prices than new purchases. Gold now accounts for nearly 10% of China’s foreign exchange reserves, significantly lower than the shares held by major Western central banks like the Federal Reserve. Analysts suggest this accumulation reflects a strategic move rather than short-term speculation on price fluctuations. Globally, central banks added record amounts of gold in Q2, with Poland leading purchases. Gold prices have faced recent volatility due to U.S. Treasury actions and expectations around potential Fed rate hikes. Despite the PBOC's continued buying, gold has struggled above $4,400 an ounce as higher interest rates increase the cost of holding non-yielding bullion.
Topics: central bank purchases China foreign exchange strategy gold reserves