Why China is importing a record amount of gold

China’s central bank has purchased gold for 23 consecutive months and the country is importing more of the precious metal than ever.

The buying frenzy reflects Beijing’s desire to reduce its dependence on the dollar and the lack of safe alternatives for Chinese households, with analysts expecting sustained demand for the bullion in a struggling economy.

The People’s Bank of China added about 23 tonnes in September, its biggest monthly purchase in nearly three years, according to data from the State Administration of Foreign Exchange, extending the longest buying streak since at least 2015.

Chinese households and businesses are turning to gold as a safe haven. The country spent a record $158.8 billion, importing more than 1,000 tonnes in the first eight months of 2026, according to customs data. This exceeds the 96.5 billion dollars and the 886 tonnes imported over the whole of 2025.

Imports of consumer gold into China hit a record in the first eight months of this year, according to Aakash Doshi, head of gold strategy at State Street Investment Management. Rising prices in China’s domestic market indicate “stronger winter seasonal demand,” Doshi said.

The accumulation in the metal comes as gold prices have fallen. They fell more than 8% in September, to around $4,176 an ounce, after hitting a record above $5,500 in January.

Doshi expects gold prices to rise to between $4,750 and $5,500 per troy ounce by the end of the first quarter of 2027, driven by robust demand.

The main motivation of the People’s Bank of China is political, according to Julius Baer Group analyst Carsten Menke, pointing to “the weaponization of the U.S. dollar and the resulting desire to be less dependent on U.S. Treasuries as a reserve asset.”

Western governments froze Russian central bank assets after the 2022 invasion of Ukraine, underscoring how foreign reserves can be restricted at times of geopolitical friction, while gold in a country’s vaults remains isolated.

China has offloaded its holdings of Treasury bills, which reached an 18-year low in July at $618 billion, according to US Treasury data, as Beijing continues to diversify its foreign exchange reserves.

Chinese demand is also fueled by gold’s reputation as a safe haven. Consumers in the country, worried about the fragility of the economy, are stocking up on jewelry, bars and gold coins.

Domestic investors have few alternatives with the real estate market, once the main store of household wealth, locked in a years-long slump. The benchmark CSI 300 index is down about 8% this year, compared with a 13% gain for the S&P 500. Yields on bank deposits and bonds have fallen amid tepid borrowing demand. The yield on one-year Chinese government bonds fell to around 1.2%, compared with around 4.46% in the United States.

“The opportunity cost of holding gold is also much lower in China than in many Western markets,” said Ole Hansen, head of commodities strategy at Saxo Bank.

Adding to the momentum from these unprecedented purchases is Beijing’s plan to build a deeper domestic gold market, giving it an incentive to replenish its stocks, Menke said. He estimated that the central bank had purchased about 190 tonnes this year as of the end of August, including 110 tonnes undeclared.

China’s demand for gold helped the precious metal withstand pressures that would have caused prices to fall further, while buoyant U.S. yields limited demand for the unprofitable precious metal. The price of gold generally falls when interest rates rise.

“Chinese purchases have become an important source of structural support for gold prices,” said Ewa Manthey, commodities strategist at ING bank. Central banks buy for the long term and are much less price sensitive than retail investors, Manthey added.

Echoing this view, Carsten noted that gold prices remained above their summer levels, even as expectations for interest rates and bond yields rose more sharply. The Federal Reserve has indicated that another interest rate hike is being considered for 2026.

The world’s fifth-largest gold holder held 2,387 tonnes as of August, according to the World Gold Council, less than a third of that held by the United States.

Any renewed confidence in Chinese real estate and stocks could dampen demand for gold, as well as a weaker yuan making gold more expensive in the country or higher interest rates making deposits more attractive, Hansen said.

The biggest change would come if central banks lost interest in reserve diversification and geopolitical tensions eased, Hansen said, adding that “neither seems particularly imminent.”