PBOC Extends Gold Purchases to 24 Straight Months Adding 25.8 Tonnes as Global Bullion Dips Below $4,000
The People's Bank of China (PBOC) extended its gold accumulation streak to a full two years in October, capitalizing on a sharp market pullback to make its largest monthly purchase since resuming accumulation in November 2024.
Official data released on Saturday showed that China added 830,000 troy ounces—equivalent to roughly 25.8 metric tonnes—bringing its total gold reserves to 78.30 million ounces at the end of October, up from 77.47 million ounces in September. During the first 10 months of 2026, the Chinese central bank added approximately 129 tonnes of bullion to its reserves. Over the same period, China's State Administration of Foreign Exchange (SAFE) reported that total foreign exchange reserves edged up by $4.9 billion to $3.405 trillion.
Buying Into Bullion's Steepest October Slump Since 2008
The PBOC's accelerated accumulation arrived during a turbulent month for precious metals. International gold prices slid nearly 7% in October, falling below the key $4,000 per ounce threshold and touching a one-year low. The drop marked the metal's worst October performance since the 2008 global financial crisis.
Rising energy costs and persistent inflationary pressures tied to broader geopolitical frictions have kept sovereign bond yields elevated, dampening investor demand for non-yielding assets. However, the retreat in spot prices prompted official reserve managers to step up value-buying.
According to figures from the World Gold Council (WGC), China was the largest publicly disclosed official buyer of gold in the third quarter. Central banks globally registered 321 tonnes of net purchases between July and September, representing the strongest quarterly sovereign demand since late 2024.
Why China's Buying Spree Matters to Indian Investors
For market participants in India—the world's second-largest consumer of physical gold—the sustained institutional accumulation by sovereign central banks carries significant market implications:
- Strong Floor Under Domestic Prices: While international rates have corrected from recent peaks, continuous central bank buying prevents extended downtrends, lending stability to gold futures on the Multi Commodity Exchange (MCX) and domestic retail rates.
- Support for Retail and Wedding Season Demand: A moderation in global prices below the $4,000 mark combined with strong sovereign backing offers favorable entry points for Indian households and jewellers entering high-demand wedding and festive cycles.
- Institutional Alignment with De-Dollarization: The Reserve Bank of India (RBI) has similarly been expanding and repatriating its domestic gold holdings over recent years. China's steady reserve diversification away from single-currency assets underscores a structural shift toward gold as an enduring safe haven.
- Implications for Gold ETFs and Sovereign Bonds: For wealth managers and retail investors holding gold exchange-traded funds (ETFs), sovereign accumulation cushions portfolios against broader equity volatility, even during cyclical rate spikes.
Despite near-term headwinds from tighter global monetary policies and firm bond yields, sovereign central banks continue to act as decisive dip-buyers, reinforcing long-term institutional confidence in gold.
