Carat640,000 ounces: China's biggest gold month since 2023
The People's Bank of China added 640,000 troy ounces in July, about 19.9 tonnes and the largest single month since October 2023. Holdings reached 76.08 million ounces, roughly 2,366 tonnes, in a 21st consecutive month of buying.
§1The biggest month since October 2023.
China's central bank bought more gold in July than in any month since October 2023. The People's Bank of China lifted its holdings by 640,000 troy ounces, about 19.9 tonnes, taking official reserves to 76.08 million ounces at the end of the month from 75.44 million at the end of June. In tonnes that is roughly 2,366 against 2,346. It was the twenty-first consecutive month in which the bank has reported a purchase and the largest single addition since the 740,000 ounces recorded in October 2023, and it was published on 7 August alongside the monthly reserve data.
Set against the quarter this paper reported a week ago, July is a step up rather than a continuation. The World Gold Council put central-bank buying at 289 tonnes in the second quarter, up 62%, with China taking 33 tonnes across those three months to a holding of 2,346 tonnes. July alone is 19.9 tonnes, close to double the monthly pace China ran through the second quarter. Twenty-one months of buying says the policy is the point, not the price. July was also the month gold closed at $4,041.70, up about half a per cent and its first monthly gain since February, so the bank raised its pace into a market that had barely moved.
§2A pace that doubled inside a flat market.
The reserve arithmetic puts the purchase in proportion. China's gold holdings were valued at $306.35 billion at the end of July against $303.72 billion at the end of June, inside total official foreign-exchange assets of $3.419 trillion, up from $3.416 trillion. Gold is therefore about 8% of the reserve, a share that sits low against most Western central banks and is the reason analysts keep describing the programme as unfinished rather than complete. At the $4,341.30 an ounce this paper's tape has carried since Friday's close, 640,000 ounces is worth about $2.78 billion, a figure derived by this desk from the published ounces rather than reported as such.
Twenty-one months of buying says the policy is the point, not the price
§3The least price-sensitive buyer in the market.
For the jewellery trade the relevance is the floor under the raw material. Official-sector demand is the least price-sensitive buying in the gold market, because a central bank running a twenty-one month programme does not stop when the metal gets dear, and that is exactly what a fabricator watching its metal line needs to price in. This paper reported on 2 August that first-half central-bank demand came to 345 tonnes, the smallest first half since 2022's 241 tonnes, after a first quarter revised down to 57 tonnes. July's print does not overturn that half. It does say the second half has started faster than the first one ended.
A central bank that buys every month is not trading, it is provisioning, and the distinction should change how the bench reads a gold headline. Speculative flows reverse on an inflation print. A reserve-diversification programme reverses on a change of national policy, which is measured in years rather than sessions. The number to keep is 8%, because that is gold's share of Chinese reserves and it is the gap the buying is closing; while it stays near that level the official sector is a standing bid underneath the price rather than a swing factor inside it. For anyone quoting a customer into the fourth quarter, that argues for quoting metal-plus rather than forward on spot, because the buyer on the other side of this market is not looking at the chart.
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