China’s central bank buys 650,000 ounces of gold, its largest monthly purchase since 2023

The People’s Bank of China added 650,000 ounces of gold to its reserves in August, its largest monthly purchase since 2023, according to data the central bank released on Monday^1,7,8. That tops July’s 640,000-ounce purchase and extends an established buying run¹. In weight terms the addition is reported as 20.2 tonnes^2,4.

The pace of accumulation has changed sharply through the year. The bank added 30,000 ounces in February, and August brought in more than 21 times that figure⁶. Reporting attributes the acceleration to the metal’s price pullback earlier in the year, which the central bank used to build the position^2,4.

Why it matters to investors

The notable feature is that the buying continued while prices rose rather than pausing on strength⁹. Gold has been holding around $4390 in the current market¹². A price-insensitive official buyer changes the character of the demand curve, because reserve managers are not trading the metal, they are reallocating away from other reserve assets.

This is not a China-only phenomenon. Global central bank gold reserves have reached an all-time high of roughly 36,600 tonnes, with Poland, China and a wave of new buyers accelerating the trend¹⁰. UBS notes survey evidence that 45% of reserve managers expect their own holdings to rise over the coming year, and continues to expect annual central bank purchases to support the market¹¹.

For portfolios, that reframes what the gold price is signalling. Reserve diversification is a slower and more persistent driver than the rate-cut and rate-hike speculation that dominates daily commentary, and it does not reverse when positioning does^10,11.

What to watch

The near-term cross-current is US monetary policy. One account puts the odds of a Federal Reserve rate increase at 60%, with producer and consumer price data the swing factor, and gold holding its level while that is resolved¹². A higher policy rate raises the opportunity cost of holding a non-yielding asset, which is the standard argument against the metal and the one that has repeatedly failed to interrupt official-sector buying this year⁴.

The counterweight is the official-sector flow itself. If the monthly additions continue at the current run rate rather than the earlier one, the structural bid outweighs the rate story^1,6. Track the monthly reserve releases rather than the price, and watch whether the pool of new sovereign buyers keeps widening beyond the established accumulators^10,11.