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The People's Bank of China remains the backbone of the country's gold strategy.
China's influence on the global gold market is becoming increasingly pervasive and structural: central bank purchases, household investments, institutional participation, and new trading infrastructure are supporting demand.
Official reserves increased from approximately 1,950 tonnes when purchases resumed in November 2022 to approximately 2,366 tonnes by July 2026.
In 2023, China added approximately 225 tonnes—the largest annual increase on record. Purchases accelerated again in the second quarter of 2026, with approximately 33 tonnes purchased, and an additional 20 tonnes in July, the highest monthly figure since October 2023.
Official statistics may underestimate actual demand. Estimates based on physical consumption data, customs statistics, investment flows, and exports from major refineries indicate that official sector purchases since January 2024 have totaled 161.6 tonnes, while the central bank reported only 130.9 tonnes. This suggests potentially unrecorded purchases of approximately 30 tonnes.
Demand is also spreading beyond the central bank. Last year, Chinese regulators allowed 10 insurance companies to invest in gold with an investment limit of up to 1% of assets. Wider adoption of this practice could create a sustainable source of institutional demand.
Household behavior has shifted: weak real estate markets, declining deposit rates, and stock market volatility have reduced the appeal of traditional savings vehicles. Demand for jewelry has weakened somewhat, but interest in bars, coins, and gold ETFs remains strong. Inflows into Chinese gold ETFs have accelerated sharply since 2023, with Huaan Yifu Gold becoming one of the country's largest ETFs by assets under management.
China is also investing in the infrastructure needed to participate more actively in global precious metals trading. Hong Kong is developing a new clearing and settlement system, a delivery mechanism linked to the Shanghai Gold Exchange, and a network of offshore vaults.
Planned warehouse capacity in Hong Kong could grow from approximately 200 tonnes to over 2,000 tonnes, signaling ambitions that extend far beyond simply purchasing gold—to include storage, clearing, settlement, and trading of the metal on a much larger scale.