China Bought 20 Tons of Gold in August, Its Biggest Haul in Nearly Three Years

China’s central bank’s gold reserves rose by 650,000 ounces of gold in August, its largest monthly addition since October 2023. 

The addition extends Beijing’s buying run to 22 straight months. Purchases sped up while gold posted its strongest monthly gain since January.

Beijing Keeps Buying While Prices Run Hot

Consecutive months of buying have transformed the pace of Chinese accumulation. The People’s Bank of China (PBOC) added 30,000 ounces in February. August brought in more than 21 times that figure, according to data from the State Administration of Foreign Exchange (SAFE).

Reserves finished the month at 76.73 million fine troy ounces. The 650,000-ounce gain equals roughly 20.2 metric tons of metal.

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The last time Beijing bought more was October 2023, at 740,000 ounces. It also topped July’s 640,000 ounces.

The reported value of the holdings jumped to $350.08 billion from $306.35 billion. The $43.7 billion swing mostly reflects the higher gold price.

The Debasement Trade Drove Gold’s Gains

The purchases came amid a strong month for gold. The precious metal gained roughly 10% in August, marking its best monthly performance since January. 

The rally was driven in part by a revival of the so-called “debasement trade.” The US Treasury’s plan to expand debt buybacks fueled concerns over inflation and a weaker dollar. That pushed investors toward stores of value such as gold and Bitcoin (BTC).

Momentum, however, faded toward the end of the month. Federal Reserve Chair Kevin Warsh struck a hawkish tone, reviving expectations of further US rate increases. 

Spot gold subsequently fell 1.75% following stronger-than-expected US jobs data. So far in September, gold is down 0.27%.

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