China Adds 650,000 Ounces of Gold in Biggest Monthly Buy Since 2023

China's central bank purchased 650,000 troy ounces, roughly 20 tonnes, of gold in August 2023, marking the largest single-month buy since 2023, according to data released by the People's Bank of China. This surpasses the 640,000-ounce purchase in July and extends a 22-month buying streak, the longest since China began disclosing monthly figures.

The PBOC's gold reserves now total 76.73 million troy ounces, up from 76.08 million in July. The value of China's gold holdings rose to $350.08 billion from $306.35 billion, primarily due to the metal's price increase rather than new acquisitions. Gold now comprises nearly 10% of China's roughly $3.4 trillion in foreign exchange reserves, significantly less than the 60% to 70% share held by Western central banks.

Analysts view China's accumulation as a strategic, long-term reserve buildup rather than a short-term bet on gold's price trajectory. The World Gold Council reported that central banks added a record 288.9 tonnes of gold in the second quarter, a 62% increase compared to the previous year. Poland led with 51 tonnes, while Uzbekistan, Kazakhstan, Jordan, and the Czech Republic also increased their gold reserves.

Despite a 10% surge in gold prices in August, the metal faced pressure from strong U.S. jobs data and a potential Federal Reserve rate hike, which could diminish gold's attractiveness due to its lack of yield.