The People’s Bank of China added 650,000 troy ounces of gold to its reserves in August, about 20.2 tonnes and its largest monthly purchase since October 2023, official data released Monday showed. The buy extended the bank’s accumulation streak to 22 consecutive months and took total holdings to 76.73 million ounces, roughly 2,387 tonnes, according to the State Administration of Foreign Exchange.
The August addition topped the 640,000 ounces bought in July and marked a sixth straight month of accelerating purchases. The pace was a modest 160,000 ounces in March, rising to 480,000 by June. China has added about 80 tonnes of gold across the first eight months of 2026, second only to Poland among reported sovereign buyers.
Price gains flatter the balance sheet
The reported value of China’s gold reserves jumped to $350.08 billion at the end of August from $306.35 billion a month earlier. Most of that $43.7 billion increase reflects bullion prices rather than new buying. Gold rose 9.7% in August, its strongest monthly advance since January, helped by a weaker dollar, lower Treasury yields and safe-haven demand tied to the conflict in the Gulf and disruption around the Strait of Hormuz.
Since then the metal has stalled near $4,400 an ounce. Traders have revived bets on further Federal Reserve rate increases after a hawkish turn from Chair Kevin Warsh late in the month, and markets now price roughly a 60% chance of a September hike. Rising yields raise the opportunity cost of holding non-yielding bullion, which has capped the price despite record central bank demand underneath the market.
Central banks keep rotating out of dollars
China is not buying alone. Central banks reported net purchases of 23 tonnes in July, led by China and Poland, according to World Gold Council data. Poland has bought 90 tonnes this year, the most of any sovereign buyer, taking its holdings to 640 tonnes against a stated target of 700, roughly 28% of its total reserves. The Czech National Bank extended its streak to 41 consecutive months, while Kazakhstan, Malaysia and Bolivia each added about a tonne. Russia was the largest net seller in July, reducing holdings by six tonnes, with Turkey, Jordan and Uzbekistan also selling small amounts.
Second-quarter net purchases across all central banks reached a record 288.9 tonnes. Reserve managers cite diversification away from dollar assets: gold carries no sovereign credit risk and sits outside another country’s financial system, an attribute that has grown more attractive as sanctions policy and Gulf tensions reshape how central banks think about reserve safety. Kazakhstan now holds 75% of its reserves in gold, an extreme case of the same logic.
China’s official gold still accounts for only about 8% of its total reserves, far below the share held by Western economies. Analysts read the steady monthly adds as a deliberate, multi-year program rather than opportunistic buying, and note that the bank has continued purchasing even as prices set records. China remains the sixth-largest reported gold holder globally.
What it means for the market
Sustained official-sector demand has been one of the pillars under the gold market’s multi-year rally, alongside ETF inflows and the so-called debasement trade. The question for the coming weeks is whether Western investment demand picks up the baton if central bank buying stays constant but yields climb. Friday’s US CPI report is the next test: a hot print would push Fed hike odds higher and likely pressure gold further, while a soft one could send prices back through $4,400. European markets are also watching the ECB, which is widely expected to raise rates on Thursday in response to the energy shock, adding another source of yield competition for bullion.
For now, the divergence is unusual. The largest central bank buyer in the world just posted its biggest monthly purchase in nearly three years, and the metal still cannot hold a level it crossed weeks ago.
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