Why is China buying up gold?

Beijing’s gold purchases reflect a shift away from reliance on US dollar assets, experts say. Save Share China is increasing its gold reserves in a bid to reduce its dependence on US dollar assets and protect against financial and geopolitical risks, analysts say, while households are turning to the precious metal amid uncertainty over the domestic economy. The People’s Bank of China reported buying gold for a 23rd consecutive month in September, when the country’s central bank also made its largest monthly purchase in nearly three years. The sustained buying points to a longer-term effort to spread risk associated with its vast reserves, experts say. Among concerns is high US debt and Western governments’ freezing of assets, which has highlighted the inherent risk in holding money overseas, particularly for emerging market and Global South economies. Gold bought and stored domestically offers protection against that risk because access does not depend on the will of another government. But central bank buying and household demand for gold in China have different drivers. While Beijing is managing its financial exposure, private investors are seeking somewhere to preserve their savings. Here is what we know. China’s central bank added approximately 23 tonnes of gold in September, bringing its reported holdings to about 2,410 tonnes, according to the World Gold Council. That was its largest monthly purchase since October 2023. Gold accounted for 8.5 percent of China’s total official reserves at the end of September, compared with 5.5 percent at the end of 2024. Reserves are assets central banks hold to ensure they can meet international payments and respond to financial disruption. They usually include foreign currencies, foreign government debt and gold. Private demand for gold within China has also risen, with purchases of gold bars and coins 28.4 percent higher in the first half of 2026 than during the same period last year, according to the China Gold Association. The buying of gold has continued amid falling prices, with gold down around 8.5 percent over the month. The World Gold Council attributed the decline in gold prices partly to a stronger dollar and higher returns on US government debt. With interest rates going up in an attempt to curb inflation, these investments are attractive for buyers as they pay interest, making them more attractive to private investors than gold, which does not....