China buys 886 tonnes of gold for $158.8 billion

China spent a record amount on gold imports this year, as the central bank and domestic investors increased their holdings of the precious metal amid global geopolitical tensions and weak yields on local assets.

Total allocations by the world’s second-largest economy for gold imports reached approximately $158.8 billion during the first eight months of the year through August, compared with just $96.5 billion for the entire year of 2025, when it imported 886 tons of the precious metal. The surge in imports followed a reduction in China’s gold purchases last year, coinciding with a sharp rally that pushed prices up from around $2,625 per ounce at the start of 2025 to a peak of $5,595 in January, according to the Financial Times.

China also maintained its position as the world’s largest gold producer, with output reaching 384 tons last year, according to data from the World Gold Council.

The data showed growing appetite among Chinese investors for gold as part of efforts to diversify assets and mitigate risks. Meanwhile, China’s holdings of U.S. Treasury bonds fell to $618 billion in July, the lowest level since August 2008.

Gold has reinforced its status as a key tool for global investment portfolio diversification, at a time when the effectiveness of government bonds as a hedge against equity market volatility has declined.

In this context, Goldman Sachs analysts estimated that the People’s Bank of China’s gold purchases exceed the officially announced figures, suggesting that the central bank bought 35 tons in July, compared with only 20 tons officially reported.

Strong Chinese demand coincided with a growing trend among several countries to relocate their gold reserves to locations closer to the final owners of the precious metal. Last month, the Dutch government moved part of its gold reserves from New York to London.