China Increases Gold Reserves for 15th Consecutive Month in January

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China increased its gold holdings for the 15th consecutive month in January, despite fluctuations in international precious metal prices. The central bank added 40,000 ounces to its reserves, bringing total gold holdings to 74.19 million ounces, according to the State Administration of Foreign Exchange on February 7.

The country’s central bank is expected to continue purchasing gold to better structure its international reserves, promote the international use of the yuan cautiously, and adapt to changing global conditions, explained Pang Ming, a senior researcher at the National Institution for Finance and Development.

This 15-month streak of gold acquisitions indicates a strategic shift toward increasing the proportion of non-credit assets in foreign reserves, highlighting a focus by authorities on the safety and long-term stability of these assets amid ongoing adjustments in the global monetary system, Pang added.

As of January 31, China’s foreign exchange reserves grew by 1.2%, or $41.2 billion, reaching $3.3991 trillion—its highest level in a decade, according to SAFE data. The increase was attributed to a weaker US Dollar Index, which measures the dollar’s value against a basket of other currencies, along with generally higher prices for major global financial assets driven by fiscal and monetary policies and market expectations in key economies. The combined effects of exchange rate changes and asset price movements contributed to the reserve increase.

The recovery in foreign exchange reserves was partly due to the appreciation of major currencies against the US dollar and the mixed performance of global financial assets, Pang highlighted. This also suggests that cross-border transactions in China remained relatively balanced, with moderate demand for foreign exchange among businesses and households, and market expectations for the yuan stabilizing.

With ongoing easing of cross-border investment and financing procedures, the appeal of China’s market to foreign investors is expected to continue growing, said Wen Bin, chief economist at China Minsheng Bank. He noted that China’s economy remains stable and resilient, providing strong support for the currency reserves to stay relatively steady.