China adds 650,000 ounces of gold to reserves in August, marking 22 straight months of buying

The People’s Bank of China bought another 650,000 fine troy ounces of gold in August, pushing its total reserves to 76.73 million ounces, roughly 2,386.57 metric tons. That’s 22 consecutive months of gold purchases without a single pause.

The addition follows July’s 640,000-ounce purchase, which itself had been the largest single-month increase since October 2023. The PBOC’s buying pace has accelerated sharply since March, when it added a comparatively modest 160,000 ounces. By June the figure had tripled to 480,000 ounces. August’s haul represents the new high-water mark in this ramp-up.

The dollar value tells an even bigger story

China’s gold reserves were valued at $350.08B at the end of August, up from $306.35B at the end of July. That’s a $43.73B jump in a single month.

Gold now accounts for roughly 8% of China’s total foreign-exchange reserves, which stood at approximately $3.438 trillion at end-August. For context, major Western central banks like the Federal Reserve and the Bundesbank hold gold at percentages north of 60-70% of their reserves.

Why Beijing keeps buying

The PBOC’s gold spree sits at the intersection of two big forces: geopolitical hedging and reserve diversification away from US Treasuries. Holding dollar-denominated assets exposes China to sanctions risk, something that moved from theoretical to very real after Western nations froze roughly $300B in Russian central bank reserves following the 2022 invasion of Ukraine.

What this means for gold prices and beyond

The broader investment community should pay attention to the pace, not just the headline number. Going from 160,000 ounces to 650,000 ounces in five months is a fourfold increase in monthly buying. If China maintains anything close to this rate, it will add north of 7 million ounces annually, roughly 218 metric tons per year of net new central bank demand from a single buyer.

That kind of demand pressure matters in a market where annual mine production globally runs in the range of 3,000-3,500 metric tons. One buyer absorbing 6-7% of global supply is significant, especially when other central banks are also net purchasers.

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