China Buys Gold at Fastest Pace Since 2023 as ETF Holdings Reach Record High
China's central bank increased its gold holdings by 23 tonnes in September, marking its largest monthly increase since 2023, while gold fund holdings in China hit a record high of 304 tonnes.
The People's Bank of China increased its gold holdings by 23 tonnes in September, its largest monthly purchase since October 2023, bringing its continuous buying streak to 23 consecutive months.
China's gold purchases reached 63 tonnes in the third quarter and 103 tonnes year-to-date, bringing total reserves to 2,410 tonnes, which account for about 8.5% of the country's reserves, valued at approximately $324 billion.
In the same context, China's gold ETF holdings reached a record high of 304 tonnes at the end of September, after attracting 11 tonnes in new inflows during the month. This reflects growing demand among Chinese investors for gold as a hedging tool.
These purchases came at a time when gold prices faced downward pressure, allowing the central bank to boost its reserves at lower levels. The steady increase is an indicator of China's gradual trend to diversify its reserves and reduce reliance on the US dollar.
What Do These Terms Mean?
Foreign Exchange Reserves: Foreign currency assets and gold held by a central bank to settle external obligations and support the domestic currency.
People's Bank of China (PBOC): The central bank responsible for monetary policy and managing foreign exchange and gold reserves in China.
Exchange-Traded Fund (ETF): An investment fund traded on a stock exchange like shares that tracks the price of a commodity such as gold. Purchasing a share gives the investor exposure to the metal's price without physically holding it.
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