China’s central bank added a net 20 tonnes of gold in July, as much gold as the combined monthly mine production of the world's 10 largest gold-producing countries. It is a largest monthly purchase since October 2023, following increases of 15 tonnes in June and 10 tonnes in May. This marked the 21st consecutive month of official gold-reserve accumulation. Year-to-date, China has raised its holdings by 60 tonnes to a record 2,366 tonnes.
The central bank is also reportedly relocating more of its gold reserves from London to Hong Kong, supporting the city’s ambition to become a major global gold-trading hub. The move coincides with Hong Kong’s launch of a new gold-clearing system designed to enhance its role in global gold trading and pricing. Chinese demand for gold remains robust, and gold, silver and other metals appear well positioned for a fresh advance after six months of consolidation.
Whether this reflects diversification away from the US dollar, preparations for a more fragmented global financial system, or a broader effort to strengthen strategic reserves, the scale of the purchases is impossible to ignore. The real question is: What is China preparing for?
