China Hoards Gold Instead of the Dollar: Purchases 88 Tons in Two Months

New data from Goldman Sachs reveals that China’s actual gold purchases far exceed those officially reported by the People’s Bank of China, as Beijing continues to reduce its holdings of U.S. Treasury bonds and diversify its foreign exchange reserves. The data show that China bought approximately 40 tons of gold in June through the London over-the-counter (OTC) market, compared with only 15 tons officially reported by the People’s Bank of China. A similar gap was recorded in May, with actual purchases reaching around 48 tons versus just 10 tons in official figures.

These figures bring China’s total OTC gold purchases for May and June to approximately 88 tons, surpassing the total official purchases announced by the Chinese central bank since the beginning of the year, according to Blockonomi, as cited by Al Arabiya. The report noted that June’s purchases rank among the largest monthly buys for China since early 2025, suggesting that the gap between official data and market estimates reflects a much higher pace of buying than is being disclosed.

Meanwhile, the People’s Bank of China continued to bolster its reported reserves, adding 20 tons of gold in July—the largest monthly increase since October 2023. Total reserves rose to a record high of 2,366 tons, marking the 21st consecutive month of increases.

This trend coincided with China’s continued reduction in exposure to U.S. assets, as Beijing’s holdings of U.S. Treasury bonds fell to $633.4 billion in June, the lowest level since 2008, signaling a continued strategy to diversify reserves away from the U.S. dollar. Demand for gold also extended to domestic investors, with open gold contracts on the Shanghai Futures Exchange surging to nearly 400,000 contracts during the current week, the highest level since September 2025.