Key Takeaways:
The People’s Bank of China expanded its gold reserves for the 18th straight month in April, signaling a continued strategic push to diversify its holdings away from the US dollar. The central bank’s holdings rose by 260,000 troy ounces, bringing its total gold reserves to 74.64 million ounces (approximately 2,321.6 tonnes), according to official data released Thursday.
This persistent accumulation underscores a broader trend of de-dollarization among global central banks, which have collectively purchased over 1,000 tonnes of gold annually between 2022 and 2024, according to data from BloFin Research. "This is true at the PBOC and retail consumer level in mainland China," Aakash Doshi, Head of Gold Commodities Fund Strategy at State Street Investment Management, told WP, highlighting the growing importance of Chinese demand in global price discovery.
The April purchase, valued at approximately $605 million based on the month's average prices, increased the value of the PBOC's gold holdings to roughly $173.5 billion. The buying streak has seen China add over 10.2 million ounces (around 317 tonnes) to its reserves since the current purchasing cycle began in November 2022. The country's broader foreign exchange reserves also climbed by $68.4 billion to $3.411 trillion in April.
Analysts see the sustained buying as a key structural support for the gold price, which was trading near $2,325.50 per ounce as of 08:00 UTC. This official sector demand creates a price-insensitive floor, insulating the market from some of the volatility driven by Western investment flows. The trend is reinforced by worsening US fiscal dynamics, with the Congressional Budget Office projecting net interest payments on US federal debt will exceed $1 trillion this year. "This could drive demand for gold amid debasement fears and diminishing purchasing power of the USD over time," Doshi said.
This article is for informational purposes only and does not constitute investment advice.
