China Adds 20 Tonnes of Gold, but Bullion Is Still Only 8% of Reserves

China’s central bank bought nearly 20 tonnes of gold in July, its largest monthly addition since October 2023, but the faster buying still barely changed gold’s share of the country’s disclosed reserve assets.

The People’s Bank of China lifted reported holdings to 76.08 million fine troy ounces from 75.44 million in June, an increase of 640,000 ounces. Reuters calculated that at almost 20 tonnes, up from a 480,000-ounce addition in June and 160,000 ounces in March. The sequence matters: the pace of purchases has accelerated for five months even as gold remains well below its January peak.

What it does not show is a wholesale replacement of foreign-currency reserves with bullion. China’s State Administration of Foreign Exchange reported July gold reserves valued at $306.35 billion and total official reserve assets of about $3.792 trillion. On those disclosed figures, gold represented roughly 8.1% of the total. In June, the comparable share was about 8.0%.

That is the useful scale check. A 20-tonne monthly purchase is large enough to matter in the official gold market, but small relative to a reserve portfolio measured in trillions of dollars. The July addition increased the quantity of reported gold by about 0.85%, while the reserve mix shifted only marginally.

The distinction is especially important after the World Gold Council revised its estimate of first-quarter global central-bank buying sharply lower. That revision weakened the idea that official-sector demand should automatically be treated as a transparent floor under gold. China’s July disclosure points the other way at the country level: reported buying is not merely continuing, it is accelerating. But the two facts can coexist because central-bank demand is uneven and reporting remains incomplete.

China has been one of the more consistent disclosed buyers. World Gold Council data showed the country added 10 tonnes in May and had accumulated 25 tonnes year to date by then. Its latest reported purchase extends that pattern, while a June survey found 45% of reserve managers expected their own institutions to increase gold holdings over the next 12 months.

Still, reserve managers do not treat gold as a simple substitute for cash or short-duration government bonds. An IMF note published in July cautioned that gold carries no credit risk but is volatile, provides only conditional diversification benefits and is poorly suited to the liquidity tranche of reserves. The note also warned that valuation gains should not be confused with an improvement in reserve adequacy.

That framework is relevant to China. SAFE’s reported value of gold rose by about $2.63 billion between June and July, almost exactly the market value of the additional 640,000 ounces at prices around $4,100 an ounce. In other words, the latest increase in reported gold value was driven primarily by added metal rather than a large valuation windfall.

Domestic demand provides a less uniformly bullish backdrop. World Gold Council data showed Shanghai Gold Exchange withdrawals rebounded 36% month on month to 87 tonnes in June, but first-half withdrawals of 598 tonnes were still 12% lower than a year earlier and 27% below the 10-year average. That leaves China with a split market: stronger official accumulation alongside weak jewellery-led wholesale demand.

The international context is also changing. Hong Kong has been expanding gold-market infrastructure and linking physical delivery more closely with the Shanghai Gold Exchange, potentially making Asian bullion flows easier to warehouse, finance and settle. That infrastructure may matter over time, but the immediate reserve story remains simpler: the PBOC is buying faster, not yet reallocating its balance sheet on a scale that would transform the global reserve system.

Samarium’s latest 24-hour gold series was unchanged at $4,341.91 from 08:59 UTC on August 8 to 07:59 UTC on August 9, with all 24 observations at the same level because the period covered weekend pricing. The flat print is therefore not a market signal. The more relevant price context is the sharp rally into the weekend after weak U.S. payrolls pushed spot gold above $4,300.

The next test is whether China keeps this pace. Another series of 15-to-20-tonne monthly additions would make the acceleration more meaningful for global official-sector demand. A return to small purchases would suggest July was opportunistic rather than a new policy speed. For now, the data support a narrower conclusion: China is adding gold more aggressively, but its disclosed reserve portfolio is still overwhelmingly something else.