What's happened
China has continued its 23-month gold-buying streak, adding about 23 tonnes in September and expanding domestic gold use as a hedge against dollar exposure and sanctions. Private demand is rising as households seek safe assets amid a slowing economy and geopolitical risk.
What's behind the headline?
Critical Analysis
- The ongoing central-bank gold purchases signal a shift to diversify reserves away from dollar-denominated assets, reducing exposure to U.S. policy swings.
- Hong Kong’s yuan-denominated gold plans could boost RMB internationalization by creating a global, RMB-priced gold market, though the dollar remains dominant.
- The stronger dollar and higher U.S. yields exert downward pressure on gold prices, yet domestic demand in China remains robust, supported by limited local alternatives for savings.
- The combination of official purchases and rising household demand points to a broader strategy: insulate from sanctions risk and reduce currency-led vulnerabilities.
- The next steps will likely see China expand domestic gold infrastructure and possibly report larger unreported purchases as it deepens its bullion holdings to stabilize reserves.
How we got here
China has pursued gradual diversification of its foreign reserves, increasing gold holdings to roughly 2,410 tonnes as of September, with gold accounting for about 8.5% of reserves. Private demand for gold in China has risen sharply in 2026, while Beijing seeks to reduce dependence on U.S. Treasuries amid broader tensions and a weaker domestic economy.
Our analysis
- Al Jazeera reports a 23-tonne September purchase bringing holdings to about 2,410 tonnes and notes gold’s 8.5% share of reserves. - CNBC discusses yuan internationalization, Hong Kong’s yuan-denominated gold market, and expert opinions on the impact of gold on RMB use. - CNBC (Sept/Oct 2026) highlights domestic demand and import trends, with projections for prices and reserve diversification.
Go deeper
- Will China’s gold purchases accelerate the RMB’s global use?
- How will higher U.S. yields influence domestic gold demand in China next quarter?
- Could more unreported purchases emerge as Beijing expands its gold market?
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The World Gold Council is the market development organisation for the gold industry. It works across all parts of the industry, from gold mining to investment, and their aim is to stimulate and sustain demand for gold.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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