China bought a record amount of gold in the first eight months of 2026, spending $158.8 billion to import more than 1,000 tonnes. The People's Bank of China added about 23 tonnes in September, marking its biggest monthly purchase in almost three years and extending a 23-month buying streak that dates to at least 2015. This accumulation already surpasses the $96.5 billion and 886 tonnes the country imported throughout all of 2025.

The central bank is using the metal to reduce reliance on the U.S. dollar. Carsten Menke, an analyst at Julius Baer Group, said the move reflects "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 Russian reserves after the 2022 invasion of Ukraine, proving that foreign-held assets can be restricted during geopolitical crises. China has already cut Treasury holdings to an 18-year low of $618 billion in July.

Households and companies are also turning to gold as the domestic economy weakens. The real estate market remains in a multiyear slump, the CSI 300 index has fallen around 8% this year, and bank deposit returns are declining. Ole Hansen, head of commodity strategy at Saxo Bank, noted that "The opportunity cost of holding gold is also much lower in China than in many Western markets." Chinese government bond yields sit at around 1.2%, compared with about 4.46% in the U.S.

Gold prices dropped more than 8% in September to about $4,176 an ounce, down from a January peak above $5,500, but Chinese purchasing has kept the metal from falling further. "Chinese buying has become an important source of structural support for gold prices," Ewa Manthey, commodities strategist at ING Bank, said. Central banks typically buy for the long term and ignore short-term price swings that affect retail traders. The Federal Reserve has signaled another rate increase for 2026, which normally pressures gold, but Beijing's demand has offset that trend.

China held 2,387 tonnes of gold as of August, according to the World Gold Council, though this remains less than a third of U.S. reserves. A stronger domestic property or stock market could eventually reduce gold purchases, as could a weaker yuan or higher local interest rates. Analysts say neither development is likely soon, leaving the gold market open to continued institutional and consumer buying.