On August 7, 2026, the People's Bank of China released its routine official reserve asset data, and a set of numbers quickly ignited market sentiment in precious metals: as of end-July, China's gold reserves had climbed to 76.08 million ounces, up 640,000 ounces from 75.44 million ounces at end-June, with the increase expanding from 480,000 ounces in June. This was the 21st consecutive month of gold purchases since the current round began in November 2024, and also the largest single-month purchase in nearly 17 months. In the complicated market environment of wide gold price swings in July and a renewed surge in early August, the PBOC, with an increasingly aggressive stance, added another important piece to the global central bank gold-buying wave.
Buying pace escalates month by month: from 'trial buying' to 'strategic acceleration'
Looking at the path of this buying cycle, the PBOC's gold purchases have not been at a steady pace, but show a distinct 'stepped acceleration.' In the first seven months of this year, monthly purchases were 40,000, 30,000, 160,000, 260,000, 320,000, 480,000, and 640,000 ounces, respectively. January and February still had an obvious trial nature, but since March the intensity increased sharply and then rose month by month; in July, amid violent gold price fluctuations, the monthly purchase volume was pushed to the highest level in nearly 17 months.
This pace sends a clear signal: central bank gold buying is not anchored to short-term price fluctuations. Data show that after the Fed's June meeting sent a more hawkish signal than expected, international gold prices fell sharply; in July, international gold prices were basically flat with end-June, but the monthly average price fell about 4% from June. Precisely at the window when gold prices weakened, the PBOC chose to accelerate purchases — completely different from the market's common mentality of chasing gains and dumping on losses, and closer to the judgment of Wang Qing, chief macro analyst at Golden Credit Rating: although gold prices are near historical highs, from the perspective of optimizing the international reserve structure, the necessity of increasing gold holdings is rising.
Global central banks in sync: Q2 net gold buying of 289 tonnes sets a record for the period
The PBOC's action is not an isolated case. According to the latest data from the World Gold Council, global central banks' net gold purchases reached 288.9 tonnes in Q2 2026, up 62% year on year, a record high for the quarter; Q1 net purchases were 244 tonnes, up 17% quarter on quarter. In the first half, total global gold demand (including OTC trading) reached 2,522 tonnes, up 2% year on year, with total value of about $380 billion, setting a new record.
Structurally, gold buying by central banks in many countries rebounded simultaneously: the PBOC bought 33 tonnes in Q2, the largest since Q4 2023; the Bank of Korea resumed gold purchases after 13 years, becoming the latest example of Asian central banks' 'strategic awakening.' Asia is transforming from a gold consumption center into a core engine of reserve accumulation, and the sustainability of this round of official institutional buying has clearly surpassed the previous buying cycle from 2010 to 2012.
Why 'buying ever more aggressively'? Three logics support long-term allocation
Logic 1: Reserve structure still has huge room for optimization
As of end-2025, among China's official international reserves, which mainly consist of foreign exchange reserves and gold reserves, gold accounted for about 8.8%. According to the European Central Bank, gold's share in the total reserve assets of global central banks had reached 27%, up significantly from 20% at the end of last year. In other words, China's gold reserve ratio is less than one-third of the global average; even after 21 consecutive months of increases, there is still considerable distance to 'meeting the standard,' which also means ample room for further purchases.
Logic 2: Gold is the 'ballast stone' of sovereign currency credit
Gold is a widely accepted final means of payment globally. A central bank's continued gold purchases can strengthen the credit foundation of the sovereign currency and create favorable conditions for steadily advancing RMB internationalization. Against the backdrop of continuously draining dollar credit due to fiscal deficit expansion, this logic has been further amplified — buying gold is not just asset allocation, but also a self-reinforcing move for the sovereign credit system.
Logic 3: In the de-dollarization 2.0 era, diversification is an irreversible trend
In recent years, the global political and economic landscape has undergone profound changes, with tariff frictions, financial sanctions, and geopolitical rifts intertwined, prompting countries to reflect deeply on their reliance on a single sovereign reserve currency. Central bank gold buying is essentially a strategic choice for reserve diversification, focusing on asset safety and risk dispersion. As Zhu Keli, founding dean of the Guoyan New Economy Research Institute, said, central bank gold buying is more like a 'safety cushion' for the market, which can genuinely raise the floor of gold prices and reduce the space for deep declines. This is a key reason gold has remained resilient in the high-interest-rate environment of recent years.
Of course, reverse warnings also exist. Some analysts have reminded that from the 1990s to the early 2000s, global central banks as a whole were still net sellers of gold. If gold prices remain high in the future and central banks turn to net selling, combined with valuation factors, it cannot be ruled out that gold will face a long-lasting and sizable correction. This is a sobering point that must be retained when judging the long-term impact of the current gold-buying boom.
Gold price linkage: the $4,300 level and the resonance of 'three positives'
In addition to central bank buying as a supporting floor, macro and geopolitical factors in early August provided momentum for gold to break upward. On August 5, spot gold surged more than 4% in a single day, successively breaking through the $4,100 and $4,200 levels, posting the biggest daily gain since February; on August 6, it touched $4,300 per ounce intraday, a nearly seven-week high. A-share precious metals stocks turned broadly higher, with many gold stocks hitting limit-up or surging.
The 'three drivers' behind this round of gains are clear:
- First, U.S. employment data collectively disappointed — July ADP private payrolls rose by just 44,000, far below the expected 70,000; JOLTS job openings fell from 7.53 million to 7.35 million; market bets on a September Fed rate hike dropped sharply from 80% to around 54.9%; lower real rate expectations directly reduced the opportunity cost of holding gold;
- Second, news that a temporary agreement to open the Strait of Hormuz was 'close to being reached' sent international oil prices down more than 5% in a single day, opening up the transmission chain of 'lower oil prices → cooling inflation expectations → lower U.S. Treasury yields,' significantly easing valuation pressure on precious metals;
- Third, the U.S. dollar index fell below the 100 mark, and together with resonance from central bank buying including the PBOC's 21 consecutive months of increases and the Bank of Korea's resumption, it provided solid bottom support for gold prices.
Outlook: short term depends on nonfarm payrolls, long term on credit
In the short term, market attention is focused on the upcoming U.S. nonfarm payrolls data. If the figure is below 70,000, gold may challenge the $4,360 or even $4,418 level; if it falls within the market-expected 80,000–90,000 range, gold may fluctuate within a $4,200–$4,300 box and wait for direction; if nonfarm payrolls rebound strongly, gold could pull back to test support. In addition, the Hormuz agreement has not been finalized, U.S.-Iran negotiations remain uncertain, and there are still hawkish voices within the Fed; after a big one-day rally, one still needs to be wary of 'hidden landmines.'
From a medium- and long-term perspective, mainstream institutions are converging. Huachuang Securities believes that the Fed's July meeting eased short-term rate hike expectations, gold has entered a repair window, and global ETF funds are gradually turning to net inflows, so the bottom for gold is relatively clear and valuation repair is likely to continue. Tian Lihui, professor of finance at Nankai University, went further — gold has entered a long-cycle bull market driven by monetary credit restructuring; the irreversible expansion of U.S. fiscal deficits, central bank gold buying forming a 'de-dollarization' closed loop, and the share of gold in emerging-market reserves still being well below the historical average — these three structural factors determine that the upward direction of gold prices has not changed.
For investors, the value of the PBOC's '21 consecutive months of increases' lies not only in the monthly data itself, but also in confirming a fundamental logic: in an era when sovereign credit and paper currency purchasing power are facing long-term challenges, gold's monetary attributes are being repriced. When official buying resonates with private investment demand, every deep pullback in precious metals may lay the groundwork for long-term allocation.
