China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices

China’s central bank has continued to strengthen its gold reserves, extending its buying streak to a 15th consecutive month in January, according to the latest data released by the People’s Bank of China (PBOC). The move highlights China’s ongoing strategy to diversify its foreign exchange reserves and hedge against global economic and geopolitical uncertainties.

By the end of January, China’s official gold holdings rose to 74.19 million fine troy ounces, up slightly from 74.15 million ounces recorded in December. While the increase in volume was modest, the value of the country’s gold reserves jumped sharply. The PBOC reported that the total value of gold reserves climbed to $369.58 billion at the end of January, compared with $319.45 billion a month earlier, reflecting the sharp rise in global gold prices during the period.

Gold, traditionally viewed as a safe-haven asset, experienced extreme volatility in January amid intense speculative buying. Prices surged to a record high near $5,600 per ounce, driven by heightened investor demand as markets reacted to political and economic risks. However, the rally proved short-lived. Following the nomination of Kevin Warsh as the next chair of the U.S. Federal Reserve toward the end of January, gold prices reversed sharply, falling to as low as $4,403.24 per ounce earlier this week. Gold has since stabilized and is currently trading at around $4,960 per ounce.

Despite strong investment demand, China’s overall gold consumption has softened. The state-backed China Gold Association reported that gold consumption fell for a second straight year in 2025, declining 3.75% to 950 metric tons. In contrast, demand for gold bars and coins surged, rising 35.14% year-on-year. This segment now accounts for more than half of total gold consumption, underscoring growing safe-haven demand among Chinese investors.

The PBOC had previously paused its gold purchases in May 2024 after an 18-month buying streak, but resumed accumulation six months later, reinforcing gold’s strategic role in China’s reserve management amid global market uncertainty.