China's central bank and households are buying record amounts of gold to reduce dependence on US dollar assets and protect against geopolitical and economic risks, though the dollar remains dominant.
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01Summary
- 01China's central bank added about 23 tonnes of gold in September 2026, its largest monthly purchase since October 2023, bringing reserves to roughly 2,410 tonnes.
- 02Gold's share of China's official reserves rose from 5.5% at end-2024 to 8.5% at end-September 2026.
- 03Private demand for gold bars and coins in China was 28.4% higher in the first half of 2026 than a year earlier, according to the China Gold Association.
- 04Western freezes of $300bn in Russian central bank assets in 2022 highlighted the risk of holding reserves abroad, analysts said.
- 05US federal debt hit $40 trillion in 2026, with the Congressional Budget Office projecting it could reach 120% of GDP by 2036.
02Why it matters
China's shift, alongside other central banks, could gradually reduce demand for US government debt if sustained, but any effect on global markets hinges on the pace and breadth of diversification.
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