China Adds 19.9 Tonnes of Gold in July as Central Banks Buy 289t in Q2

Central banks are still buying gold at a record pace. The People's Bank of China added 19.9 tonnes to its reserves in July - its largest monthly purchase since October 2023 - extending a buying run into a 21st consecutive month.

Beijing's longest accumulation streak on record

July marked the 21st straight month of additions by the PBOC, the longest continuous run in its record. Having resumed purchases in late 2024, the bank has not paused since - a pattern that points to a standing reserve-diversification policy rather than an opportunistic trade.

289 tonnes in three months

Globally, the World Gold Council estimates central banks bought roughly 289 tonnes in the second quarter, up about 62% year on year and a record for a second quarter, led by Poland and China.

Buying into a falling market

Notably, that buying happened while prices were falling through the quarter - a sign that official-sector decisions are driven by strategic considerations, namely diversifying reserves and reducing dollar dependence, rather than by a bet on price direction.

What it means for the market

Official demand puts a relatively firm floor under the market, because it is far less price-sensitive than investment or jewellery demand - the latter fell around 17% over the same quarter. The persistence of that pattern helps explain why some banks are holding on to elevated gold targets despite recent volatility.

Key terms explained:

Official reserves: Assets a central bank holds in foreign currencies and gold to support the stability of its national currency.

Reserve diversification: Spreading reserves across several assets instead of concentrating them in one currency, in order to reduce risk.

Official-sector demand: Gold purchases by central banks and government institutions, as distinct from retail and institutional investor demand.

World Gold Council: An international body representing the gold industry that publishes regular supply and demand reports.

Tonne: A unit of weight equal to 1,000 kilograms, used to measure central bank gold purchases.