China boosts gold reserves to new heights, sending gold prices soaring
China, the sixth-largest holder of gold globally, has maintained its position with official gold holdings of 2,300 tons, according to recent reports. The United States holds the most gold at 8,133 tons.
The People's Bank of China (PBOC) has been steadily increasing its gold reserves, purchasing 21 tons of gold so far this year. This accumulation strategy is part of efforts to reduce reliance on the U.S. dollar and diversify reserve assets.
The move by China to accumulate gold is a response to lessons drawn from Western sanctions on Russia in 2022. Gold, being a commodity that cannot be sanctioned or blocked, makes it a preferred hedge for emerging economies.
Central banks collectively purchased over 1,000 tons of gold in both 2023 and 2024, reflecting a growing trend towards gold as a safe haven asset.
Despite China's gold accumulation, gold still accounts for only about 7% of China's $3.6 trillion in total reserves, compared to the global average of 22%. This relatively low share may encourage Beijing to continue expanding its gold stockpile.
Weaker jewelry demand and stronger domestic mining activity contributed to the decline in China's gold imports. Despite this decline, the rally was supported by expectations of further interest rate cuts by the U.S. Federal Reserve (Fed), continued geopolitical risks, and a weaker U.S. dollar.
The decline in China's gold imports does not necessarily indicate a slowdown in China's overall gold accumulation strategy. In fact, China imported 323 tons of gold in the first half of 2025, a 62% decrease from the previous year. However, this decrease may be attributed to the strong domestic mining activity rather than a shift in China's gold accumulation strategy.
In contrast, Russia's central bank achieved the highest gold imports compared to other countries in 2025, continuing a strong trend of net purchases with significant additions to gold reserves in the first half of the year and overall high buying activity expected for the full year.
Gold prices closed the week at an all-time high of $3,586 per ounce, marking a 4.04% weekly gain. Since the start of the year, the precious metal has risen nearly 37%.
Analysts suggest that the ongoing geopolitical tensions, expectations of further interest rate cuts, and the continued weakening of the U.S. dollar will continue to support gold prices in the near future. As a result, it is expected that central banks, including China, will continue to accumulate gold as part of their reserve diversification strategies.
