PBOC extends gold-buying streak to 20 months with biggest increase in current cycle

The People's Bank of China, the country's central bank, extended its gold-buying streak to 20 months in June, recording its largest monthly increase in the current accumulation cycle as bullion prices retreated from earlier highs.

According to central bank data released on Tuesday, the PBOC added 480,000 ounces to China's official gold reserves last month to hit 75.44 million ounces. The increase came as gold prices fell further in June after hitting a record high early this year.

The latest addition marked the biggest monthly increase since the central bank resumed gold purchases in November 2024, according to market tracker Wind Info.

Shao Yu, chief economist at the innovation center of Fudan University's School of Management, said that the PBOC acts more like a long-term allocator than a short-term trader — slowing purchases when prices rise significantly, while stepping up buying during precipitous declines.

Shao said that the PBOC is likely to continue its "small but steady" approach to increasing gold holdings, reflecting both strategic positioning and efforts to optimize costs over time.

The PBOC may not be the single central bank buying gold on dips. Ray Jia, head of research for Asia-Pacific excluding India at the World Gold Council, said that a recent survey by the council found a record share of central banks expect to keep increasing gold reserves over the next 12 months, citing a volatile international landscape and other risks as key drivers.

Meanwhile, the State Administration of Foreign Exchange reported on Tuesday that China's foreign exchange reserves declined by $26 billion, or 0.75 percent, to $3.4163 trillion by the end of June amid a stronger US dollar and a mixed performance of global asset prices, ending two straight months of increase.

The administration added that the country's steady economic progress provides solid support for reserve stability.