Over the first eight months, the country imported more than 1,000 tonnes of the precious metal, spending a record 158.8 billion dollars on it. For comparison, in all of 2025 China imported 886 tonnes of gold for a total of 96.5 billion dollars. The main reason behind this demand is the desire of both the state and private investors to protect their savings against the backdrop of geopolitical instability and the weak returns of other assets.
According to the Financial Times, Chinese holdings of US Treasury bonds fell in July to 618 billion dollars, the lowest level since August 2008. At the same time, attractive investment options inside the country have shrunk. The property market crisis has continued since 2021, the CSI 300 index has lost 1.8% since the start of the year and stands more than a fifth below its early 2021 peak, while the yield on Chinese government bonds has also approached historic lows.
Meanwhile, the real volumes of the People's Bank of China's purchases may be higher than the official figures. Goldman Sachs estimates the central bank's July buying at 35 tonnes, against the 20 tonnes officially declared. China, in turn, is the world's largest producer of gold, yet its domestic output is clearly not enough for current demand.
Last year the country mined 384 tonnes of gold. The Chinese domestic market keeps gold prices slightly above global levels, which stimulates further imports. According to Jinrui Futures analyst Zijie Wu, an additional factor has been the strengthening of the yuan and shifts in world gold prices.
A strong national currency creates more favorable conditions for purchases abroad. Against this backdrop, Chinese exchange-traded funds are also increasing their gold holdings. In August its gold reserves rose by 650,000 ounces, the largest monthly addition since 2023.
The central bank has been steadily increasing its gold reserves for almost two years, Bloomberg writes. It is no coincidence that last year China opened its first offshore vault for state gold reserves, on the territory of Hong Kong. Before that, it usually kept its gold only in the vaults of the People's Bank of China.
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