The People’s Bank of China (PBoC) has extended its gold-buying streak to 14 consecutive months, signaling a sustained demand for the precious metal amid record-high prices. According to data released on Wednesday, the PBoC increased its gold reserves by 30,000 troy ounces in December 2025, bringing its total gold purchases during this buying cycle, which began in November 2024, to approximately 1.35 million ounces (equivalent to 42 tons).
Gold’s Performance and Central Bank Demand
Gold experienced significant volatility in December 2025, reaching a record-breaking high before losing some of its gains. Despite this, the precious metal recorded its best annual performance since 1979, supported by strong central bank purchases, heightened geopolitical concerns, and growing demand for alternative value stores. Many investors and nations have turned to gold as a hedge against currency depreciation and a way to reduce reliance on sovereign bonds and traditional currencies.
Central Banks Rush to Gold
A recent report by the World Gold Council revealed that central banks purchased nearly as much gold in the final months of 2025 as they did during the first eight months of the year combined. These figures highlight the critical role of official gold demand in supporting prices throughout the year. Many countries are increasingly viewing gold as a strategic asset to mitigate risks associated with the US dollar’s dominance.
China’s Gold Purchases May Exceed Official Data
While the official figures from the PBoC indicate steady gold accumulation, analysts believe the actual purchases may be significantly higher. Goldman Sachs estimates that China added around 15 tons of gold to its reserves in September 2025, far exceeding the one-ton increase reported by Chinese authorities. This discrepancy underscores the challenge of accurately assessing China’s true gold holdings.
A Strategic Hedge
China’s ongoing gold purchases reflect a broader strategy to diversify its reserves and reduce reliance on the US dollar in light of global economic uncertainties. The move aligns with a growing trend among central banks worldwide to strengthen their gold reserves as a safeguard against financial instability and potential currency fluctuations.
As gold continues to play a key role in the global financial system, the PBoC’s persistent buying spree underscores the metal’s enduring appeal as a reliable store of value and a hedge against economic volatility.
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