China’s central bank has held off on adding gold to its reserves for the fourth consecutive month in August, according to official data released on Saturday. Despite the pause, the value of China’s gold holdings rose to $182.98 billion at the end of August, up from $176.64 billion in July, as global gold prices continue to surge.
China’s total gold reserves remain at 72.8 million fine troy ounces. Gold prices have climbed by 21% this year, driven by expectations of imminent U.S. interest rate cuts and increased demand for safe-haven assets amid global geopolitical and economic uncertainty. Central banks worldwide have also been actively increasing their gold reserves in response to these factors.
Before the pause, the People’s Bank of China (PBOC) had been purchasing gold consistently for 18 months, making it the largest single buyer of gold in 2023. The decision to halt purchases has reduced demand from Chinese investors in recent months, contributing to a slowdown in the domestic gold market.
Despite the current pause, analysts expect the PBOC to resume its gold purchases in the near future. Carsten Menke, an analyst at Julius Baer, suggested that the central bank’s motivations may be political rather than purely economic, citing China’s desire to reduce its reliance on the U.S. dollar as a reserve asset.
