China’s central bank continued to build its gold reserves in June, extending its buying streak to 20 consecutive months despite a sharp decline in bullion prices, signalling its ongoing commitment to diversifying foreign exchange reserves.
Bloomberg reported that data released by the People’s Bank of China (PBOC) on July 7 showed its gold holdings rose by 480,000 troy ounces to 75.44 million ounces in June. The latest purchase was the largest monthly addition since October 2023 and marks the longest uninterrupted buying streak since at least 2015.
The accumulation came even as gold prices tumbled 12% in June, their steepest monthly decline since 2008, after falling below the US$4,000-an-ounce level. The sell-off was driven by rising inflation concerns linked to the Iran conflict and a more hawkish stance from the US Federal Reserve, fuelling expectations of further interest rate hikes that typically weigh on non-yielding assets such as gold.
The sharp correction has also prompted major financial institutions, including Goldman Sachs and Deutsche Bank, to lower their year-end gold price forecasts.
Despite the near-term weakness, central bank demand continues to provide structural support for the precious metal. The latest World Gold Council survey released in June found that a record number of central banks expect to increase their gold holdings over the next 12 months, underscoring gold’s enduring role as a strategic reserve asset amid global economic and geopolitical uncertainty.
