New Delhi. Amidst the continuous rise in gold prices, China has continued purchasing the precious metal. The People's Bank of China (PBOC), China's central bank, added more than 20 tonnes of gold to its gold reserves in August 2026. With this, the process of increasing China's gold reserve continued for the 22nd consecutive month.
After the latest purchases, China's gold reserves have reached about 2,387 tonnes. China's ever-increasing gold purchases are not being seen merely as an investment. Experts are linking this to China's long-term strategy to strengthen foreign exchange reserves and reduce dependence on the US dollar.
Biggest increase in three years in August
According to China Daily report, China's central bank's gold reserves increased by about 650,000 ounces in August compared to the end of July. This is said to be the biggest increase in any one month after October 2023. In October 2023, China had increased its gold reserves by about 7,40,000 ounces.
China's gold purchasing in the last three months has also been at the highest level since October 2023. In this way, despite gold becoming increasingly expensive, China's purchases have not decreased.
Why is China continuously buying gold?
China's broader economic and strategic thinking is believed to be behind its continuous gold purchases. China is trying to diversify its foreign exchange reserves. Under this, apart from the US dollar, he is increasing his stake in safe assets like gold.
Gold is not considered directly linked to the currency or financial system of any one country. In such a situation, for central banks it can be a medium to balance the risk in foreign exchange reserves. China's continuous purchases are being viewed from this perspective.
Effort to reduce dependence on dollar
The US dollar plays an important role in the global trade and financial system. China has long been working towards making its foreign exchange reserves and international financial position more diversified.
In such a situation, purchasing gold can help China reduce its dependence on dollar-based assets. Also, in case of global economic or geopolitical instability, gold reserves can serve as a safe asset.
Longest buying streak since 2015
China's central bank's 22 consecutive months of gold purchases is significant in itself. According to available data, this is China's longest continuous streak of gold purchases since 2015.
This indicates that increasing gold reserves for China is not a short-term step, but part of a long-term strategy. Through continuous purchases, China wants to strengthen its reserves and also create a protective shield against global financial risks.
China is not stopping even expensive gold
Generally, when prices rise, there may be a decrease in purchase of any item, but in the case of China the picture is different. Despite gold prices being high in the international market, PBOC's purchases are continuing.
This means that China's priority is not just to make immediate profits, but to strengthen its strategic reserves. In the coming time, if China continues to buy gold at this pace, it may have an impact on the global gold market and the purchasing trends of central banks.