China's central bank makes biggest gold reserve addition since 2023

The People’s Bank of China added 650,000 ounces of gold to its reserves in August, the biggest monthly increase since 2023, according to figures the central bank published on Monday.

This acquisition marks the 22nd straight month of gold purchases for the PBOC. It is one of the biggest official-sector buyers of gold globally.

The central bank’s purchase came as gold prices rose close to 10% in August, rebounding from weakness earlier in the year. That rally was accompanied by a fresh wave of interest in the debasement trade.

Concerns about inflation and possible dollar depreciation were triggered by the U.S. Treasury’s announced increase in buybacks of government debt. Those worries pushed investors toward alternative stores of value, with gold among the beneficiaries.

The PBOC’s sustained gold buying, alongside that of other central banks, has underpinned a positive longer-term view among gold traders. Still, high bond yields remain a headwind for the asset, which pays no interest, in the near term.

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