China’s Gold Strategy: A Breakdown of Beijing’s Reserve Diversification Push

As gold prices soar to new heights in September 2025, reaching $3,820 per ounce, central banks worldwide are intensifying their accumulation efforts, with China leading the charge among emerging markets. The People’s Bank of China (PBOC) has emerged as a pivotal force in this trend, extending its gold-buying spree to 10 consecutive months through August. At Sixty Ventures, we recognize this as more than a market reaction—it’s a calculated component of China’s broader economic and geopolitical playbook. In this post, we break down the evolution, drivers, and implications of China’s gold strategy, drawing on the latest data to illuminate how Beijing is reshaping its reserves and global finance.

Historical Context: From Reluctant Accumulator to Strategic Buyer

China’s engagement with gold reserves has evolved dramatically over the past two decades. Official reporting began in 2009, revealing holdings of around 1,054 tonnes at the time—a fraction of its $2 trillion foreign exchange reserves. This opacity stemmed from a heavy reliance on U.S. dollar-denominated assets, which peaked at over 60% of reserves in the early 2010s.

The turning point came in 2015 with the launch of the Shanghai Gold Exchange (SGE) internationalization efforts, followed by sporadic buying sprees. Between 2018 and 2022, the PBOC added modestly, but post-2022 geopolitical shifts— including U.S.-China trade tensions and the Russia-Ukraine conflict—accelerated the pace. An 18-month buying streak from late 2022 to mid-2024 added over 300 tonnes, pausing briefly for six months before resuming in November 2024. By Q2 2025, official reserves stood at 2,298.53 tonnes, valued at approximately $243.99 billion—up from $206.53 billion in January. Analysts speculate unreported holdings could push totals above 5,000 tonnes, underscoring gold’s role in hedging against dollar volatility.

This buildup aligns with China’s “dual circulation” economic model, emphasizing domestic resilience and reduced external dependencies.

Current Buying Trends in 2025: Steady and Disciplined Accumulation

2025 has seen the PBOC maintain a disciplined pace, adding gold even as prices hit records. Year-to-date through August, purchases total around 40+ tonnes, with monthly increments of 2-5 tonnes. Key highlights:

• January: +5 tonnes, kickstarting the year amid a 5% rise in Shanghai Gold Benchmark Prices.

• February-March: Continued additions, with reserves hitting 2,100+ tonnes by Q1 end.

• April-May: Momentum built, adding ~10 tonnes combined, defying a brief global slowdown.

• June: +2.18 tonnes (70,000 troy ounces), eighth straight month.

• July: Ninth month of buys, though exact volume undisclosed; reserves valued at $253.84 billion by end-July.

• August: Tenth consecutive addition, pushing holdings to 74.02 million fine troy ounces (~2,302 tonnes).

• September (Preliminary): No official data as of September 29, but trends suggest continuation, supported by easing gold import rules announced mid-month.

This contrasts with earlier pauses (e.g., July 2024), where high prices prompted restraint. The PBOC’s approach is “price-insensitive,” prioritizing long-term positioning over short-term costs—adding at averages above $3,000/oz.

Key Drivers: De-Dollarisation, Geopolitics, and Yuan Internationalisation

China’s gold strategy is multifaceted, rooted in three pillars:

1. De-Dollarization Imperative: With U.S. Treasuries comprising ~50% of its $3.317 trillion reserves (as of June 2025), Beijing seeks to dilute dollar exposure amid sanctions risks and fiscal concerns. Gold now accounts for ~7-8% of reserves (up from 2% in 2019), but analysts argue it needs 20%+ to match its economic heft—potentially requiring another 2,000-3,000 tonnes. This mirrors global shifts, with the dollar’s share in allocated reserves at a 12-year low of 57.74% in Q1 2025.

2. Geopolitical Hedging: Escalating U.S.-China frictions, including tariffs and tech restrictions, amplify gold’s safe-haven appeal. Beijing views it as a neutral asset for financial sovereignty, especially post-2022 SWIFT exclusions for Russia.

3. Backing the Yuan: Gold accumulation bolsters RMB credibility in global trade. Initiatives like yuan-denominated gold futures on the SGE and Belt and Road partnerships encourage gold-backed settlements, fostering a multipolar monetary system.

These drivers explain the PBOC’s consistency: 2025 buys total 1.22 million troy ounces since November 2024, signaling unwavering commitment.

Broader Initiatives: Positioning China as a Global Gold Custodian

Beyond domestic reserves, China is aggressively courting foreign gold to elevate its financial influence:

• Shanghai Gold Exchange Expansion: The SGE is pitching itself as a custodian for sovereign gold, offering storage and trading for partner nations (e.g., BRICS allies). This reduces reliance on Western vaults like the Bank of England, aligning with de-dollarization.

• Eased Licensing Rules: In September 2025, the PBOC simplified gold import/export regulations, boosting wholesale flows and positioning China as Asia’s pricing hub.

• Strategic Stockpiling: Annual commodity reserves acceleration includes gold, tying into fiscal stimulus for economic buffers.

These moves could reshape price discovery, with SGE premiums influencing global benchmarks.

Implications for the Global Gold Market

China’s strategy has profound ripple effects:

• Demand Boost: PBOC buys contribute ~5-10% of annual global demand, absorbing supply and fueling 2025’s 44% price surge.

• Market Volatility: Opaque reporting creates uncertainty, but steady accumulation counters ETF outflows.

• Geopolitical Shifts: By challenging dollar dominance, it encourages similar diversification (e.g., Poland’s 20% gold target), potentially lifting prices to $4,000/oz by mid-2026.

For traders, this underscores gold’s enduring role amid uncertainty.

Outlook: Sustained Push Toward Reserve Parity

Looking ahead, expect the PBOC to add 50-100 tonnes annually, targeting 3,000+ tonnes by 2030. Risks include a stronger dollar or resolved tensions, but Beijing’s trajectory—43% of surveyed central banks planning increases—points to acceleration. As J.P. Morgan forecasts, gold could average $3,675/oz in Q4 2025, with upside from Chinese demand.

At Sixty Ventures, Principal Vick Subra’s expertise in commodities positions us to navigate these dynamics. Our OECD-compliant Partner Network offers elite access to ethical gold trades, spot contracts, and vaulting—ideal for capitalizing on China’s influence. Contact us for bespoke strategies that align with this evolving landscape.

Sixty Ventures: Prosperity Together.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Consult professionals for investment decisions.