China has accelerated its gold accumulation as part of a strategy to reduce the dollar's dominance in global reserves. The People's Bank of China added 480,000 ounces (approximately 14.9 tons) of gold to its reserves in June, making its largest monthly purchase since October 2023.
According to data from the State Administration of Foreign Exchange, the country's gold holdings rose from 74.96 million ounces in May to 75.44 million ounces in June. According to Bloomberg, this extended the People's Bank of China's longest uninterrupted buying streak since at least 2015.
Gold prices fell 12% in June, dropping below $4,000 per ounce and experiencing their biggest monthly decline since 2008. The sharp drop was driven by inflation concerns heightened by war risks against Iran and expectations of interest rate hikes by the US Federal Reserve (Fed).
The price decline also reduced the dollar value of China's gold holdings. The value of gold in reserves fell from $340.75 billion in May to $303.72 billion at the end of June. The country's total foreign exchange reserves, meanwhile, declined from $3.442 trillion to $3.416 trillion over the same period.
Central banks favor gold over the dollar
According to the World Gold Council's annual survey published in June 2026, central banks accumulated an average of 1,000 tons of gold annually over the past four years. This figure is double the annual average of 500 tons in the previous decade.
The survey, which included 76 central banks, revealed that 89% of respondents expect global central bank gold reserves to increase over the next 12 months. The proportion expecting their own institution's gold holdings to rise over the same period reached 45%, the highest level in the survey's history.
According to the survey, 74% of respondents believe the dollar's share of global reserves will decline over the next five years, while gold's share will increase. This expectation makes China's moves part of a broader transformation in global reserve distribution.
Among the reasons central banks hold gold, its performance during crises, portfolio diversification, inflation hedging, and precaution against geopolitical risks stand out. Ninety percent of survey participants said gold's performance in times of crisis is an important factor in their decision to hold it; this is the highest level recorded for this factor in the survey's history.
Geopolitical instability is a more decisive factor especially for emerging economies. According to the survey, 95% of banks in this group said geopolitical uncertainty influences their reserve management, while the figure remained at 67% in advanced economies.
In a statement in July, the World Gold Council announced that central banks returned to net purchases in May with 41 tons, and that China was among the prominent buyers alongside Poland, Uzbekistan, and Kazakhstan. China had added 25 tons to its reserves from the start of the year through May, and further increased its purchases in June.
