China’s Central Bank Boosts Gold Holdings at the Fastest Pace Since 2023, Adding 480,000 Ounces in June

The People's Bank of China (PBOC) continued to expand its official gold reserves in June, adding approximately 480,000 troy ounces, equivalent to nearly 14.9 metric tons, marking its largest monthly purchase since October 2023. The latest increase also extended the central bank’s gold-buying streak to 20 consecutive months, underscoring Beijing’s ongoing strategy of diversifying its reserves away from U.S. dollar-denominated assets despite the sharp decline in global gold prices during the month.

Dr. Walid Farouk, Director of Marsad Al Dahab for Economic Studies, said the latest data released by the People's Bank of China showed that the country's official gold reserves rose to 75.44 million ounces at the end of June, up from 74.96 million ounces at the end of May. Meanwhile, the value of China's gold holdings declined to approximately $303.7 billion, compared with $340.7 billion a month earlier, reflecting lower global gold prices rather than any reduction in physical holdings.

He explained that China's decision to continue purchasing gold despite the metal's decline of more than 11% during June sends a clear signal to global markets that major central banks view gold not as a short-term investment, but as a long-term strategic reserve asset capable of protecting national reserves and strengthening financial stability amid rising geopolitical tensions and persistent uncertainty surrounding the global monetary system.

Farouk noted that the pace of China's gold purchases has accelerated significantly in recent months, with monthly additions increasing from roughly 160,000 ounces in March to 260,000 ounces in April, 320,000 ounces in May, and finally 480,000 ounces in June, indicating that Beijing has been taking advantage of lower prices to accumulate gold at more attractive levels.

He added that gold still accounts for less than 10% of China's total official reserves, a proportion that remains well below the average allocation among many central banks worldwide. This suggests that China still has considerable room to further increase its gold holdings if it continues its strategy of reserve diversification and reducing reliance on the U.S. dollar.

Farouk also pointed out that the increase in gold reserves comes as China's foreign exchange reserves declined to approximately $3.416 trillion at the end of June, down by around $26 billion from the previous month due to the stronger U.S. dollar and volatility across global financial markets. This further reinforces gold's importance within official reserve portfolios as an asset largely insulated from currency risks and financial sanctions.

He emphasized that continued demand from central banks—particularly China—remains one of the strongest long-term pillars supporting the global gold market, even during periods of temporary price weakness driven by a stronger U.S. dollar or changing expectations for U.S. interest rates. He also noted that the latest survey by the World Gold Council found that 45% of central banks plan to increase their gold reserves over the next 12 months, the highest level recorded since the survey began.

Farouk concluded that the key message for global markets is that central banks, led by China, continue to accumulate gold even during price corrections, highlighting a structural shift in global reserve management and reaffirming gold's enduring role as one of the world's most important safe-haven and store-of-value assets.