China pushes central bank gold purchases to 79 tonnes in August

That total climbed from roughly 44 tonnes in July and sat well above the average of 17 tonnes seen each month before 2022, per Goldman’s calculations. Rather than depending solely on official announcements, which can lag or omit certain transactions, the bank builds its figures from trade and flow data, so its numbers can come in above what’s formally disclosed.

China’s central bank, the People’s Bank of China, officially recorded an increase of around 20 tonnes in August, extending a buying run approaching two years. Later Chinese figures revealed the institution’s biggest single-month addition in about three years came in September, its 23rd consecutive month of accumulation. Data for October was expected to be published close to November 7.

According to Rick Kanda, who heads The Gold Bullion Company, monetary authorities are leaning more heavily on gold (XAU/USD) as a means of spreading out their reserves and cutting their exposure to the dollar, a trend that gathered pace after Western nations froze Russian holdings in response to the 2022 invasion of Ukraine. He added that central banks, unlike fund managers, generally pursue multi-year reserve strategies and tend not to chase short-term price moves.

Goldman characterizes this steady official appetite for gold as a lasting shift in the bullion market rather than a short-lived spike. Kanda warned, however, that this wave of central bank gold buying doesn’t ensure prices will keep climbing, since factors like borrowing costs, market mood and geopolitical tension can counteract it — though he agreed that ongoing demand should help keep prices propped up over time.

Why it matters for markets: A sustained, China-led wave of official gold purchases creates a structural demand floor that can support prices regardless of near-term moves in rates or the dollar, underscoring a broader pivot away from dollar-based reserve holdings.

Source: Mining.com