China’s central bank (called the People’s Bank of China) bought more gold in August, marking 10 months in a row of adding to its gold reserves. China’s Gold Reserves Rise to 74.02 Million Ounces in August. This is up from 73.96 million ounces at the end of July. The value of this gold increased from $243.99 billion in July to $253.84 billion in August—partly because the price of gold rose.
Why China is buying Gold?
China is buying gold for strategic, economic, and financial reasons. Gold is a non-correlated asset, meaning its value often moves independently from currencies and stocks. Buying gold wii help China to diversify its foreign exchange reserves and reduce dependence on the U.S. dollar. As of now China holds a large amount of U.S. dollar-denominated assets (like U.S. Treasury bonds).
Building gold reserves could help back the Yuan as a more trusted global currency. China sees gold as a long-term store of value that retains purchasing power over time. As part of central bank policy, it enhances financial stability and confidence in the Chinese economy.
What experts says about China buying gold?
Adrian Ash from BullionVault (a gold investment company) said that China’s ongoing gold buying shows it sees gold as a strong, reliable asset for the future. And when the government shows confidence in gold, it also makes regular people in China more confident about investing in gold too.
Even though China is buying a bit less gold this year than last year, it’s still buying at higher prices, which shows it still believes in gold’s value long-term.
Gold inside China
Even though China is a top producer and buyer of gold, people there are buying less physical gold (like jewelry or coins) right now. Because prices are high, so gold dealers are offering discounts to try to attract more buyers.
Gold is often seen as a safe investment—especially when the world feels uncertain (like during wars, inflation, or financial instability). So people and countries buy gold to protect their wealth.
This year, gold prices have gone up 35%, and even hit a record high last week. That’s partly because countries like China are buying a lot, which increases demand and pushes prices up.