China’s appetite for gold has reached unprecedented levels, with the central bank purchasing the metal for 23 consecutive months and imports hitting record highs. This aggressive accumulation reflects Beijing’s strategic move to reduce reliance on the U.S. dollar, alongside a surge in demand from Chinese households seeking safe-haven assets amid economic uncertainty.
Data from the State Administration of Foreign Exchange indicates that the People’s Bank of China added approximately 23 tonnes in September, marking its largest monthly purchase in nearly three years. This extends the longest buying streak on record, dating back to at least 2015. On the consumer side, customs data reveals that China imported over 1,000 tonnes of gold in the first eight months of 2026, valued at a record $158.8 billion. This significantly surpasses the 886 tonnes and $96.5 billion imported throughout all of 2025.
The buying spree occurs even as global gold prices have retreated, dropping more than 8% in September to around $4,176 per ounce. Prices had previously soared to a record above $5,500 in January. Despite the recent pullback, analysts remain bullish. Aakash Doshi, head of gold strategy at State Street Investment Management, forecasts prices could climb to between $4,750 and $5,500 per troy ounce by the end of the first quarter of 2027, citing robust underlying demand and strong seasonal winter consumption.
Carsten Menke, an analyst at Julius Baer Group, describes the PBOC’s motivation as primarily political. He points to the “weaponization of the U.S. dollar” and a desire to lessen dependence on U.S. Treasuries as reserve assets. This sentiment was reinforced after Western nations froze Russia’s central bank assets following its 2022 invasion of Ukraine, highlighting the vulnerability of foreign-held reserves. Consequently, China has reduced its Treasury holdings to an 18-year low of $618 billion in July.
Domestic demand is further fueled by a lack of attractive investment alternatives. With the real estate sector, traditionally the primary store of household wealth, in a prolonged slump, and the CSI 300 index down roughly 8% this year, investors are turning to bullion. Meanwhile, bank deposit and bond returns have dwindled, with China’s one-year government bond yield hovering around 1.2%, compared to approximately 4.46% in the United States.
This sustained Chinese demand has acted as a cushion for global gold prices, counteracting pressure from rising U.S. yields. Ewa Manthey, a commodities strategist at ING Bank, noted that central bank purchases provide structural support, as these buyers are less sensitive to short-term price fluctuations than retail investors. Menke added that China is also replenishing inventories to build a deeper domestic gold market, estimating the central bank purchased around 190 tonnes by late August, including unreported acquisitions.
However, analysts warn that renewed confidence in China’s property and equity markets, a weaker yuan, or higher interest rates could dampen future gold demand. Ole Hansen of Saxo Bank observed that the opportunity cost of holding gold is currently much lower in China than in many Western markets. Nevertheless, both Hansen and Menke suggest that a major reversal in reserve diversification trends or geopolitical easing does not appear imminent.
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