(Yicai) Aug. 10 -- China’s gold reserves increased for the 21st consecutive month in July, as the People’s Bank of China continued to add to its holdings amid a pullback in international gold prices, according to the latest data.

The central bank’s gold reserves rose by 640,000 ounces in July to 76.08 million ounces as of July 31, according to data released by the State Administration of Foreign Exchange.

The PBOC’s gold purchases were mainly driven by a temporary correction in gold prices, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International. International gold prices fell sharply in June after the US Federal Reserve sent more hawkish signals than expected at its policy meeting that month. While international gold prices at the end of July were unchanged from the end of June, the average price in July was 4 percent lower than in June. This may have been a direct reason for the central bank to accelerate its gold purchases last month, Wang said.

In the long run, profound changes in the global political and economic landscape are the key driving force behind the PBOC’s continued accumulation of gold.

As of the end of 2025, gold accounted for about 8.8 percent of China’s international reserves, which are mainly comprised of foreign exchange and gold reserves, according to data. By comparison, gold accounted for 27 percent of central banks’ total reserve assets globally as of the end of 2025, up from 20 percent a year earlier, according to data released by the European Central Bank on June 2.

China’s share of gold in its official reserves remains relatively low, leaving significant room for further accumulation, Wang said. Gold is globally accepted as the ultimate means of payment, and increasing gold reserves can strengthen confidence in a sovereign currency and create favorable conditions for the steady internationalization of the Chinese yuan.

“Although gold prices are near historical highs, the need to hike gold reserves has grown from the perspective of optimizing the structure of international reserves,” Wang said.

Globally, central banks continue to show strong demand for gold. The World Gold Council’s 2026 Central Bank Gold Reserves Survey found that 45 percent of central banks surveyed expect to increase their gold reserves over the next 12 months, highlighting gold’s important role in the long-term stability of official reserves.

Reserve Growth

China’s foreign exchange reserves stood at USD3.42 trillion at the end of July, up USD2.5 billion from the end of June and remaining above USD3.4 trillion for the fourth consecutive month, according to data released by SAFE on Aug. 7.

SAFE attributed the increase to the combined effects of exchange-rate movements and changes in asset prices. In July, the US dollar index fell amid shifts in the global macroeconomic environment and monetary policies in major economies, while prices of major global financial assets moved in different directions.

The downward trend of the US dollar index in July had a significant impact on the size of China’s foreign exchange reserves, slightly outweighing the impact of an overall decline in the prices of major global financial assets, Wang said.

The US dollar index tumbled 1.3 percent at the end of July from the end of June, said Guan Tao, global chief economist at BOC International (China). The resulting valuation gains on China’s non-US dollar-denominated assets within its foreign exchange reserves helped boost the overall size of the reserves, he said.

Looking ahead, exports, which are a key pillar of China’s international balance of payments, are expected to maintain strong growth, said Wen Bin, chief economist at China Minsheng Bank. The global manufacturing industry’s upward cycle driven by investment in artificial intelligence is continuing, supporting growth in both the volume and value of semiconductor-related exports. At the same time, foreign trade companies are actively expanding into diversified markets, providing an additional source of growth, Wen added.

Editor: Kim Taylor