China is adding to its gold reserves at a record pace. The People’s Bank of China bought about 23 tonnes in September, its largest monthly increase in nearly three years, extending its buying streak to 23 months. Separately, China imported more than 1,000 tonnes of gold in the first eight months of 2026, worth $158.8 billion—already exceeding the full-year totals of 886 tonnes and $96.5 billion in 2025.
Demand is coming from households and businesses as well as the central bank. With the property market still weak, equities under pressure and deposit and bond yields falling, gold has regained appeal as a way to diversify assets. China’s sustained buying is providing structural support for global prices, though future demand will depend in part on the yuan, domestic asset markets and global interest rates.
PBOC extends gold-buying streak to 23 months
The PBOC added about 23 tonnes of gold in September, its biggest monthly purchase in nearly three years and part of one of its longest buying cycles since 2015. World Gold Council data show that China held 2,387 tonnes in official reserves at the end of August, ranking fifth globally but still below one-third of US holdings.
Carsten Menke, an analyst at Julius Baer, said reducing reliance on dollar assets and US Treasuries is an important reason for the accumulation. The freezing of Russian central bank assets after the 2022 conflict in Ukraine has also prompted countries to reassess the limits that foreign financial systems could impose on overseas reserves. Gold held in domestic vaults does not depend on another country’s financial infrastructure.
US Treasury data show China’s holdings of US Treasuries fell to $618 billion in July, their lowest level in 18 years. As China adjusts the composition of its foreign-exchange reserves, it is continuing to increase its gold allocation. Menke estimates that the PBOC bought about 190 tonnes in the first eight months of this year, of which roughly 110 tonnes may not yet have been publicly disclosed.
Imports have already surpassed 2025’s full-year total
Customs data show that China imported more than 1,000 tonnes of gold in the first eight months of 2026, with a value of $158.8 billion. Both figures exceed the full-year totals for 2025, pointing to broad demand across jewellery, bars and coins—not just changes in central bank reserves.
Aakash Doshi, head of gold strategy at State Street Investment Management, said Chinese consumer gold imports reached a record in the first eight months of the year. A widening premium for domestic gold over international prices also points to strengthening demand ahead of the winter season.
Prices have not risen continuously alongside demand. Gold fell more than 8% in September to about $4,176 an ounce, after setting a record above $5,500 in January. Doshi expects prices could trade between $4,750 and $5,500 an ounce by the end of the first quarter of 2027 if demand remains resilient. That is a market forecast, not a settled view of the price path.
Weak property market limits alternatives for households
Household demand for gold is also linked to poor performance elsewhere in China’s domestic investment market. The property sector has been in a prolonged downturn, putting pressure on housing, which has long served as a major store of wealth for families. The benchmark CSI 300 index is down about 8% this year, while the S&P 500 has gained roughly 13%.
Returns on deposits and bonds have also been affected by weak borrowing demand. China’s one-year government bond yield has fallen to about 1.2%, well below the roughly 4.46% yield on US one-year Treasuries. In that environment, the interest income forgone by holding non-yielding gold is comparatively limited.
Ole Hansen, head of commodity strategy at Saxo Bank, said the opportunity cost of holding gold is lower in China than in many Western markets. For households concerned about the economic outlook, jewellery, bars and coins can serve both as consumer goods and as stores of value when financial assets are performing unevenly.
Chinese buying helps cushion pressure on prices
Stronger demand has helped gold absorb some of the pressure from rising US Treasury yields. Because gold pays no interest, higher rates and bond yields typically weigh on it. But long-term purchases by China and other official institutions are less sensitive to short-term price moves.
Ewa Manthey, a commodity strategist at ING, said Chinese buying has become an important source of structural support for gold prices. Menke also noted that gold remained above its summer levels even as expectations for interest rates shifted in a more hawkish direction and bond yields rose significantly.
The US Federal Reserve has signalled that it could raise rates again in 2026. A further rise in US real rates could weigh on gold, while continued central bank purchases and Chinese physical demand may help limit the downside.
The yuan and domestic markets remain key variables
China’s gold demand faces potential constraints. Hansen said that if confidence in the property and equity markets recovers, households may have less reason to increase their gold holdings. A weaker yuan raises domestic gold prices and could curb some imports; conversely, higher deposit rates could make bank assets more attractive relative to gold.
A broader shift in global central bank reserve strategies could also matter. If central banks scale back diversification away from foreign-exchange assets, or geopolitical tensions ease materially, strategic demand for gold could cool. For now, sustained official buying, fewer attractive domestic investment options and record Chinese physical imports remain key factors for the gold market.