Why China is importing record amounts of gold

China’s central bank has been buying gold for 23 consecutive months, and the country is importing more precious metals than ever before.

The buying spree reflects the Chinese government’s push to reduce dependence on the dollar and the lack of safe alternatives for Chinese households, and analysts expect demand for gold to continue amid a weak economy.

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

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

China’s consumer gold imports hit a record high in the first eight months of this year, said Aakash Doshi, head of gold strategy at State Street Investment Management. Doshi said the rise in land price premiums in China indicates “the strength of winter seasonal demand.”

As gold prices fall, the metal is accumulating. After hitting a high of more than $5,500 in January, it fell more than 8% in September to about $4,176 an ounce.

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

Julius Baer Group analyst Carsten Menke said the People’s Bank of China’s main motivations were political, pointing to “the weaponization of the U.S. dollar and a related desire to reduce its dependence on U.S. Treasuries as a reserve asset.”

After the 2022 invasion of Ukraine, Western governments froze Russia’s central bank assets, highlighting how foreign-held foreign exchange reserves can be constrained in times of geopolitical friction, while gold held in domestic vaults remains sequestered.

As Beijing continues to diversify its foreign exchange reserves, China sheds its holdings in U.S. Treasuries, reaching an 18-year low of $618 billion in July, according to U.S. Treasury data.

China’s demand is also driven by gold’s reputation as a safe-haven asset. Consumers in the country, worried about the unstable economy, are buying up gold jewelry, bars and coins.

With the property market, once the main store of household wealth, locked in a multi-year slump, domestic investors have few options. The benchmark CSI 300 index is down about 8% this year, while the S&P 500 index is up 13%. Returns from bank deposits and bonds are falling as demand for borrowing has slumped. China’s one-year government bond yield has fallen to about 1.2%, compared to about 4.46% in the United States.

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

Further fueling the unprecedented buying momentum is the Chinese government’s plan to build a deeper domestic gold market, prompting inventory replenishment, Menke said. He estimated that the central bank had purchased about 190 tonnes by the end of August this year, including 110 tonnes that had not been reported.

Chinese gold demand is helping the bullion withstand pressure that could cause further price declines, as high US yields continued to suppress demand for the non-yielding precious metal. Typically, when interest rates rise, the price of gold falls.

“China’s purchases are an important source of structural support for gold prices,” said Ewa Mansey, commodity strategist at ING Bank. Manthey added that because central banks buy for the long term, they are much less price sensitive than individual investors.

Kirsten echoed that view, noting that gold prices remain above their summer levels even though interest rate expectations and bond yields have risen more sharply. The Fed has indicated it is considering further rate hikes in 2026.

According to the World Gold Council, the world’s fifth-largest gold holdings held 2,387 tonnes as of August, less than a third of the United States’ holdings.

Hansen said renewed confidence in China’s real estate and stocks could slow demand for gold, a weaker yuan could boost domestic gold prices, and higher interest rates could make deposits more attractive.

Hansen said bigger changes would occur once central banks lose interest in diversifying foreign exchange reserves and geopolitical tensions ease, adding: “Neither seems particularly imminent.”