China's central bank posted its biggest monthly gold purchase in more than two and a half years in June, even as bullion prices suffered their worst month since 2008. The buying extends a 20-month streak and mirrors a broader push by emerging-market central banks to accumulate gold.
China's central bank bought more gold in June than in any month since October 2023, adding to its reserves through the sharpest price drop the metal has seen in over a decade. The People's Bank of China lifted its holdings to 75.44 million fine troy ounces by the end of June, up from 74.96 million a month earlier. That 480,000-ounce rise, near 15 metric tons, was the largest monthly addition since October 2023, when holdings grew by 740,000 ounces.
Buying through a price slump
The purchase marked a 20th straight month of accumulation. Yet the dollar value of the reserves fell, amounting to $303.72 billion at the end of June, down from $340.75 billion in May.
The drop tracked a steep fall in the metal. Spot gold tumbled 11.65% in June, the worst since October 2008, briefly breaking below $4,000 an ounce. A stronger dollar and bets that the Federal Reserve would keep interest rates elevated accompanied the slide. The Iran war also kept concern alive that inflation could stay sticky despite peace talks.
Emerging markets keep accumulating
China's steady buying fits a wider pattern. Central banks across emerging markets have continued accumulating gold despite record prices, treating the metal as a hedge against geopolitical uncertainty, sanctions and currency swings while trimming their reliance on major foreign currencies.
The shift gathered pace after Russia's invasion of Ukraine in February 2022. Gold has rallied from around $2,000 an ounce in early 2024 to above $4,000 an ounce in 2026, sharply lifting the dollar value of central bank holdings worldwide. Beijing's June addition shows that appetite has held even as the rally stalled.
Sources: Reuters, TradingView (Moneycontrol)
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