China's central bank extended its gold-buying streak to 21 consecutive months in July 2026, recording its largest monthly gold purchase since October 2023. The accelerated pace of official-sector buying comes as gold has staged a technical breakout following months of consolidation, reinforcing the view that sustained central bank demand remains a key structural driver of the precious metal. For GCC investors tracking safe-haven assets and reserve diversification trends, the combination of renewed bullish price momentum and continued sovereign buying strengthens the long-term investment case for gold.
China's Gold Buying Picks Up Pace
According to data released by the People's Bank of China (PBOC) on August 7, 2026, official reserves rose to 76.08 million fine troy ounces at the end of July, up from 75.44 million ounces a month earlier, an increase of roughly 640,000 ounces, equivalent to nearly 20 metric tons.
The July addition was the largest since October 2023, when holdings rose by 740,000 ounces, and it marks the fifth straight month in which the pace of accumulation has quickened, a trend that began in March 2026 with a comparatively modest 160,000-ounce addition.
World Gold Council analyst Krishan Gopaul noted that the July purchase lifted China's year-to-date net additions to 60 tonnes, bringing total holdings to 2,366 tonnes. Two other central banks also added to reserves in July: the Czech National Bank (+1.7 tonnes, moving toward a stated 100-tonne target) and the National Bank of Kazakhstan (more than 1 tonne).
China's continued accumulation comes as reserve diversification gathers pace across Asia. For more on another notable development, see our analysis, Bank of Korea Returns to Gold After a 13-Year Pause, which examines why South Korea has resumed gold purchases for the first time since 2013 and what it means for gold markets.
Gold Prices Hold Firm Despite Volatility
As shown in Figure 1, gold has experienced a volatile 2026. Spot prices reached a record high of US$5,400.25/oz on January 28, driven by escalating U.S.–Iran tensions and safe-haven demand, before falling around 25% by late June as the U.S. dollar strengthened to a 13-month high. Prices have since recovered and stabilized above US$4,000/oz, trading around US$4,306–4,310/oz in early August.
The recent recovery has also resulted in a technical breakout. Spot gold has moved above a key near-term resistance level after consolidating through much of the second quarter, signalling improving bullish momentum. Combined with continued central bank buying, the breakout reinforces the constructive outlook for gold despite ongoing macroeconomic uncertainty.
July itself saw gold rise 0.84%, snapping four consecutive monthly declines and marking its largest monthly increase since February, aided by softer U.S. inflation data and easing oil prices, which tempered expectations for further Fed rate hikes. Analysts also noted that sustained central bank demand has been a key factor helping gold maintain support above the $4,000/oz level despite heightened market volatility.
Deutsche Bank projects gold reaching $4,700/oz by year-end, while State Street Investment Management sees potential for $5,000/oz by late 2026 or early 2027, both citing sustained central bank buying as the key structural driver. Deutsche Bank also noted that official-sector gold demand reached a record US$45 billion in the second quarter, reinforcing the view that central bank buying remains a key pillar supporting gold prices. This aligns with our earlier analysis in "Central Banks' Gold Survey Reveals Why Gold Demand Could Stay Strong," which explores why reserve managers continue increasing gold allocations despite elevated prices and geopolitical uncertainty. Goldman Sachs estimates that a 20-tonne rise in China's average monthly sovereign purchases since Russia's reserves were frozen in 2022 has itself accounted for over a 20% increase in gold prices.
BMO Capital Markets also estimates China's actual above-ground gold stockpile may be closer to 30,000 tonnes, well above the officially reported ~5,222 tonnes at the end of 2024, suggesting China's true gold holdings may be significantly larger than officially disclosed. The firm also estimates China is now driving around one-third of global gold demand flows.
Bottom Line
China's accelerating official gold purchases and the recent technical breakout in gold prices reinforce the view that official-sector demand remains a structural pillar of the gold market. With prices holding above US$4,000/oz after early-year volatility, and multiple bank forecasts pointing toward US$4,700–5,000/oz by year-end, sustained central bank buying, rather than short-term speculative flows, continues to support a constructive outlook for gold.
