China extends gold buying streak in March despite price decline

China's central bank continued to increase its gold reserves in March, extending its buying streak to 17 consecutive months, even as several other central banks moved to offload the precious metal.

Data released by the People's Bank of China on Tuesday showed that China's official gold holdings reached 74.38 million ounces at the end of March, up from 74.22 million ounces at the end of February.

The steady accumulation bucked the decline in gold prices after the outbreak of geopolitical conflicts in the Middle East. Central banks in countries such as Turkiye and Russia have reportedly reduced their gold reserves recently, diverging from the broader trend seen in recent years.

Analysts said China's continued purchases underscore a long-term strategic rationale rather than short-term price considerations, noting that gold has increasingly been viewed as a key component in reserve diversification and a hedge against geopolitical risks and currency volatility.

Lin Yan, chief macro analyst at Guolian Minsheng Securities, said the underlying logic of central bank gold accumulation remains intact, underpinned by the weakening credibility of the US dollar and reinforcing the long-term upward trend in gold prices.