Why is China buying up gold?
Summary
China is buying more gold to reduce its reliance on US dollar assets and protect against financial risks. The country's central bank has been increasing its gold reserves for nearly two years, while Chinese households are also buying more gold due to worries about the economy.Key Facts
- China’s central bank added about 23 tonnes of gold in September 2026, totaling around 2,410 tonnes.
- Gold now makes up 8.5% of China’s official reserves, up from 5.5% at the end of 2024.
- Chinese households bought 28.4% more gold bars and coins in the first half of 2026 compared to the previous year.
- The price of gold fell about 8.5% in September 2026 due to a stronger US dollar and higher interest rates on US government debt.
- China wants to reduce its reliance on US government debt because of concerns about US debt levels and the risk of asset freezing by foreign countries.
- Holding gold domestically helps China avoid risks linked to foreign governments potentially freezing assets.
- The freezing of Russian overseas assets by Western countries after 2022 shows how foreign reserves can be suddenly inaccessible.
- US federal debt reached $40 trillion in 2026, raising concerns about Washington’s long-term ability to pay back debt held by China.
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