China's central bank has bought gold for 23 straight months, and the country is importing more of the precious metal than ever.
That buying spree reflects Beijing's push to cut its dependence on the dollar, and Chinese households' lack of safe alternatives, with analysts expecting sustained demand for the bullion in a struggling economy.
The People's Bank of China added about 23 tonnes in September, its biggest monthly purchase in almost three years, according to State Administration of Foreign Exchange data, extending the longest purchasing streak since at least 2015.
Chinese households and companies are turning to gold as a safe haven. The country spent a record $158.8 billion, importing more than 1,000 tonnes in the first eight months of 2026, customs data show. That exceeds the $96.5 billion and 886 tonnes imported in all of 2025.
Consumer gold imports in China hit a record in the first eight months of this year, according to Aakash Doshi, head of gold strategy at State Street Investment Management. The surging premiums in China's onshore prices indicate "stronger winter seasonal demand," Doshi said.
The accumulation of the metal comes as gold prices have fallen. They pulled back more than 8% in September to about $4,176 an ounce, after in January hitting a record above $5,500.
Doshi forecasts gold prices to rise to $4,750 to $5,500 per troy ounce by the end of the first quarter in 2027, buoyed by robust demand.
The PBOC's main motive is political, according to Carsten Menke, an analyst at Julius Baer Group, pointing to "the weaponization of the U.S. dollar and the related desire to be less dependent on U.S. Treasuries as a reserve asset."
Western governments froze Russia's central bank assets after its 2022 invasion of Ukraine, underscoring how foreign-held reserves can be restricted at times of geopolitical friction, while gold in a country's own vaults remains insulated.
China has offloaded holdings of Treasurys, which reached an 18-year low of $618 billion in July, according to U.S. Treasury data, as Beijing continued to diversify its foreign-exchange reserves.
Chinese demand is also being fueled by gold's reputation as a safe haven. Consumers in the country, nervous about the shaky economy, are loading up on gold jewelry, bars and coins.
Domestic investors have few alternatives with the real estate market, once the main store of household wealth, locked in a multiyear slump. The benchmark CSI 300 index is down around 8% this year, versus the S&P 500's 13% gain. Returns from bank deposits and bonds have declined amid tepid borrowing demand. China's one-year government bond yield fell to around 1.2%, against about 4.46% in the U.S.
"The opportunity cost of holding gold is also much lower in China than in many Western markets," said Ole Hansen, head of commodity strategy at Saxo Bank.
Adding to the momentum of the unprecedented buying is Beijing's plan to build a deeper domestic gold market, prompting it to replenish inventories, said Menke. He estimated that the central bank bought around 190 tonnes this year by end-August, including 110 tonnes that were unreported.
China's demand for gold has helped bullion withstand pressures that would have caused a deeper fall in prices, as buoyant U.S. yields kept a lid on demand for the non-yielding precious metal. The price of gold usually goes down when interest rates go up.
"Chinese buying has become an important source of structural support for gold prices," Ewa Manthey, commodities strategist at ING Bank. Central banks buy for the long term and are far less sensitive to price than retail investors, Manthey added.
Echoing that view, Carsten pointed out that gold prices have stayed above their levels in summer, even though interest rate expectations and bond yields have risen more sharply. The Federal Reserve has indicated another interest rate hike on the cards for 2026.
The world's fifth-largest gold holder owned 2,387 tonnes as of August, according to the World Gold Council, less than a third of the that held by the U.S.
Any renewed confidence in China's property and equities could blunt demand for gold, as well as a weaker yuan that makes gold pricier at home or higher interest rates that make deposits more attractive, Hansen said.
The larger shift would come if central banks lost interest in diversifying reserves and geopolitical tensions eased, Hansen said, adding that "neither appears particularly imminent."
