Record Monthly Purchase
In August, the People's Bank of China expanded its gold reserves by 650,000 ounces, marking the most substantial monthly increase since 2023. This addition, equivalent to about 20.2 tonnes, was disclosed by the State Administration of Foreign Exchange on September 7. It represents the 22nd consecutive month of purchases, setting a new record for the longest buying spree. The data was also verified by Bloomberg.[S1]
The central bank's total gold stockpile now amounts to 76.73 million troy ounces, or roughly 2,386.6 tonnes, with an estimated value of $350 billion at prevailing market rates. Notably, this acquisition occurred despite a near 10% surge in gold prices during August, partly fueled by the 'debasement trade' associated with the US Treasury's plans to increase buybacks of government debt. Typically, central banks prefer to purchase during price dips, but China deviated from this pattern.[S1]
A Strategic Shift Away from Dollars
The sustained buying suggests a deliberate strategy to diversify away from dollar-denominated assets, which still dominate China's foreign reserves. Each additional tonne of gold represents a small step toward reducing exposure to the dollar. The 22-month streak is not accidental, indicating a longer-term bet against holding dollars.[S1]
China is not buying in isolation. Central banks worldwide purchased 244 tonnes of gold in the first quarter of 2026, spending $37 billion, the largest quarterly outlay on record. This broader institutional shift has been building since Russia's reserves were frozen in 2022, prompting many finance ministries to reconsider their dollar holdings.[S1]
Parallel Channels and Future Outlook
Hong Kong has emerged as a key transit point for Russian gold subject to sanctions, with imports reaching 92.1 tonnes in 2025—a 42% increase valued at approximately $10.5 billion. During the first seven months of 2026, nearly 100 tonnes passed through the territory, almost triple the volume from the same period a year earlier, worth around $14.5 billion. A significant portion of this bullion is subsequently shipped to mainland China, where import quotas and robust demand facilitate its absorption.[S1]
While not proof of a coordinated plan, the official PBOC purchases and the parallel channel of Russian gold both point in the same direction. Gold remains below its all-time high of $5,589.38 per ounce set on January 28, 2026, but whether the PBOC continues buying at this pace once it reaches that peak is the next number to watch.[S1]
