China Boosts Gold Reserves As Banks, ETFs Keep Buying

Gold prices are bullish, trading at a historic high since jan 2025. China’s central bank has been constantly accumulating gold reserves, despite the decline in purchases by everyday investors due to high prices. Analysts see this Chinese bank move as more strategic and optimistic for other investors seeking a haven because of high inflation and market liquidity.

The People’s Bank of China added over 740,000 troy ounces of gold in October 2025. This is China’s 12th consecutive monthly purchase. The bank’s total official holdings have now exceeded 71.2 million ounces, up from 62.6 million at the end of 2023. Analysts say China is hedging against USD exposure and inflation risks. Along with that, the bank is also using gold as a protective shield against geopolitical uncertainties worldwide.

The recent PBoC monthly reserve statement was “At the end of October 2025, China’s gold reserves stood at 74.09 million fine troy ounces, up from 74.06 million ounces in September. The value of the gold reserves reached $297.21 billion, compared with $283.29 billion in September.”

Now, US Treasury holdings have been reduced, while China is continually diversifying its reserve strategy through gold accumulation. Both countries are also competing in the crypto market, recently emphasised by Donald Trump. While China is not obviously supporting crypto and has even built strict laws to prevent its adoption in the country, Trump claims that they are moving forward hiddenly.

According to experts, China is on a long-term de-dollarisation mission. The country is preparing for a major global monetary shift. Its accumulation pace is not ordinary, even outstripping that of Turkey and Russia, signalling that something bigger will happen soon.

ETF Inflows vs. Retail Demand: Market Divergence

Although consumer demand for jewellery and bullion has been consistently decreasing, Chinese gold ETFs are seeing a steady net inflow. China’s gold association stated in its quarter 3 report that “China’s gold ETFs surged 164% in the first nine months of 2025, adding 79 tons and bringing total holdings to 193.7 tons by end-September.”

The retail slowdown might be temporary, as it hasn’t happened due to people’s dislike of gold or a shift to another metal. Rather, it’s just because household priorities are shifting due to high inflation and high gold prices.

Steve Zhou, Fund Manager at Huaan Fund Management Co., emphasised that “Retail investors have been the main drivers of the outflows. Some investors are taking profits from gold and rotating into equities to chase stronger momentum.”

However, for institutional investors, gold remains a favourite one to currency and global political instability, as well as the severe impact of market volatility. They are seeking the safest way to invest their money in a growing asset. ETF’s current behaviour suggests a forward-looking, optimistic outlook. Now, gold is in greater demand from macro strategists than from retail consumers.

Global Impact: Signals to Markets and Policymakers

As China continues to accumulate gold, it may put pressure on global prices, leading them to rise. Right now, a few other central banks are following the same trend; however, if all global central banks were to follow suit, gold would become entirely inaccessible to retail and small investors.

It raises questions regarding future reserve composition, especially in emerging markets. It also signals something deeper in BRICS economies. However, the question is whether this PBoC’s move will influence global inflation expectations and commodity-linked currencies. We have to wait and see whether this move proves tactical or a structural monetary alignment.