Gold prices are driven not just by the gold individuals buy or sell. In fact, one of the biggest factors that drives gold prices is the trendline of central banks buying or selling gold.And large economies like India and China have been buying gold for the last few years. While India’s purchases have somewhat reduced, China has increased its gold reserves by the largest amount since 2023 in August, stepping up purchases even as bullion prices climbed sharply during the month.
China’s record gold buying spree
Data released by the People’s Bank of China on Monday showed that its gold holdings increased by 650,000 ounces. China, which ranks among the world’s biggest official-sector gold buyers, has now continued adding bullion to its reserves for 22 consecutive months.Gold prices had spent much of the year facing pressure but staged a strong recovery in August, gaining almost 10% as the so-called debasement trade returned.Concerns over inflation and a weaker dollar grew after the US Treasury announced plans to increase buybacks of government debt. This encouraged investors to look for alternative stores of value, including gold.The PBOC’s continued accumulation, along with gold purchases by other sovereign investors, has provided some reassurance to bullish investors about the metal’s longer-term prospects, according to a Bloomberg report. In the near term, however, elevated bond yields continue to pose a challenge for gold, which does not generate interest.
Central banks on gold buying spree
Central banks remained net buyers of gold in July, with reported purchases of 23t, according to World Gold Council data. Emerging-market central banks were also active during the month, led by China, which bought 20t, and Poland, which added 8t.Buying by the People’s Bank of China has gathered pace in recent months. The central bank has reported double-digit monthly gold purchases since May 2026.Russia, meanwhile, was the largest net seller in July, reducing its gold holdings by 6t. Turkey, Jordan and Uzbekistan each recorded sales of 1t.Central banks have reported net gold purchases of around 130t so far this year, compared with approximately 160t accumulated during the same period last year.Significant reported activity in July and year-to-date as reported by the World Gold Council is:
- The National Bank of Poland added another 8t of gold in July, extending its run of purchases. With 90t bought so far this year, Poland remains the biggest central-bank gold accumulator on a y-t-d basis. Its gold holdings have reached 640t, against a target of 700t, and account for approximately 28% of its total reserves.
- The PBoC added 20t to its gold reserves in July, marking its 21st consecutive month of purchases. China’s gold reserves have increased by 60t so far this year, putting it behind only Poland in terms of reported purchases. The country’s official gold holdings now account for 8% of its total reserves, standing at around 2,366t, making China the sixth-largest reported gold holder globally.
- The Central Bank of Uzbekistan recorded a 1t sale in July, while its gold purchases for the year so far stand at 40t. The central bank recently attracted attention after Governor Timur Ishmetov sought to engage with American money managers. Ishmetov said that while “gold has turned out to be the best investment so far”, the central bank is considering possible sales at “favourable prices” as part of its broader reserve management strategy. Gold makes up 87% of Uzbekistan’s total reserves, with holdings of about 431t.
- The Czech National Bank purchased another 2t of gold in July, extending its net buying streak to 41 consecutive months. Its purchases for the year have reached 12t, taking total gold holdings to 84t, equivalent to 6% of its total reserves.
- The National Bank of Kazakhstan (NBK), Bank Negara Malaysia (BNM) and the Central Bank of Bolivia (CBB) each bought 1t of gold during the month. Kazakhstan has accumulated 29t so far this year, placing the NBK among the world’s five biggest gold accumulators. Gold accounts for 75% of Kazakhstan’s total reserves. Malaysia and Bolivia are comparatively recent participants in the gold market, with the BNM holding 6t and the CBB 2t on a y-t-d basis.
- The Central Bank of Russia remained a net seller in July, disposing of another 6t of gold. Its sales for the year have reached 50t, taking Russia’s total gold holdings down to 2,277t.
- The Central Bank of the Republic of Turkey sold 1t of gold in July. Its total sales for the year now stand at 85t.
