China's Gold Reserves Reach $350 Billion After 22 Months of Continuous Purchases

The People’s Bank of China (PBOC) has announced that its gold reserves were valued at $350.08 billion at the end of August, a notable rise from $306.35 billion at the end of July. This increase follows a consistent buying trend, with August marking the 22nd consecutive month of gold purchases.

In August alone, the PBOC added 650,000 fine troy ounces of gold, bringing its total reserves to 76.73 million ounces, or approximately 2,386.57 metric tons. This marks a significant acceleration in the pace of purchases, which has increased sharply since March 2023, when only 160,000 ounces were added.

The valuation jump of $43.73 billion in just one month highlights not only the physical purchases but also the rise in gold prices during this period. Gold now constitutes about 8% of China’s total foreign-exchange reserves, which stood at around $3.438 trillion at the end of August.

China's ongoing gold accumulation is largely seen as a strategy to hedge against geopolitical risks and diversify away from dollar-denominated assets, especially in light of sanctions risks that became apparent after the 2022 invasion of Ukraine. Analysts suggest that if this purchasing trend continues, China could significantly impact global gold supply, as it could account for over 7 million ounces annually, representing a substantial portion of global mine production.