China’s accumulation of gold reflects a broader effort to reduce reliance on US dollar-denominated assets, particularly US government debt, according to experts
A sales assistant displays a gold bar as an investment for a customer at Caibai Jewelry store, in Beijing, China, August 6, 2019. Photo: Jason Lee/Reuters
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A sales assistant displays a gold bar as an investment for a customer at Caibai Jewelry store, in Beijing, China, August 6, 2019. Photo: Jason Lee/Reuters
China’s sustained accumulation of gold reflects efforts by its central bank to diversify foreign reserves and reduce exposure to geopolitical risks, alongside growing demand from households seeking to hedge against domestic economic uncertainty.
The People’s Bank of China (PBoC) bought gold for the 23rd consecutive month in September 2026, adding about 23 tonnes, its largest monthly purchase in nearly three years. The purchases brought its reported official holdings to around 2,410 tonnes, says Al Jazeera.
Gold accounted for 8.5% of China’s official foreign reserves at the end of September, up from 5.5% at the end of 2024.
Diversifying reserves
China’s accumulation of gold reflects a broader effort to reduce reliance on US dollar-denominated assets, particularly US government debt, according to experts.
Beijing’s focus on assets that do not depend on foreign governments or financial systems has grown following Western nations’ decision to freeze roughly $300 billion in Russian central bank overseas assets after Russia’s 2022 invasion of Ukraine.
Gold held domestically cannot be frozen or sanctioned by foreign governments, making it an alternative reserve asset amid geopolitical tensions.
Rising US federal debt, which has surpassed $40 trillion, has also raised questions about long-term fiscal sustainability and encouraged China to diversify its reserves into other assets.
Households turn to gold
Gold demand is also growing among Chinese households, which are increasingly buying bars and coins as a store of value amid uncertainty over domestic investments.
Purchases of gold bars and coins rose 28.4% year-on-year in the first half of 2026.
The demand comes as China’s property market remains depressed, weighed down by overbuilding and falling house prices, while stock market performance has also been weak. These conditions have limited the appeal of alternative domestic investments and encouraged households to seek safer assets.
Global shift, gradual diversification
China’s gold purchases form part of a wider trend among central banks, particularly in emerging market and Global South economies, seeking to strengthen the resilience of their reserves. Poland is among the countries pursuing similar accumulation.
Analysts say the trend represents gradual diversification rather than an immediate retreat from the US dollar, which remains the dominant global reserve currency and medium of transaction.
However, a sustained shift by central banks towards gold could reduce demand for US Treasuries over time.
Despite its recent purchases, China’s reported gold holdings remain significantly below those of the United States, which holds more than 8,133 tonnes.