(Kitco News) – The People’s Bank of China (PBoC) increased its gold reserves by nearly 10 tonnes last month, its 19th consecutive month of bullion purchases, according to the latest government data.
The State Administration of Foreign Exchange (SAFE) announced on Sunday that China's official gold reserves rose by 320,000 troy ounces or 9.95 tonnes in May to a total of 74.96 million troy ounces or 2331.52 tonnes.
China's total foreign exchange reserves rose to $3.4422 trillion at the end of May, increasing by $31.7 billion or 0.93% from April. This is the highest level for China’s FX reserves since November 2015, and they have remained above $3.3 trillion for the past 10 months.
SAFE attributed the growth of reserves to a number of factors, including a firmer U.S. Dollar Index and rising global asset prices, adding that China's sound economic momentum has underpinned the stability of its reserves.
Experts have noted that China's rising foreign exchange reserves are closely linked to the country’s export performance.
China's total foreign trade in the first four months of 2026 rose to $2.39 trillion, an increase of 14.9% year-on-year, with exports rising by 11.3% percent to $1.37 trillion and imports rising 20% percent to $1.01 trillion, according to the latest data from China's General Administration of Customs.
Meanwhile, China’s domestic gold market has shown definite signs of cooling in recent weeks.
“Amid heightened market uncertainty, gold ETFs have seen an overall reduction in assets under management, with several funds experiencing significant net outflows,” noted a report from Gelonghui Finance. “As of June 3, 14 gold ETFs recorded combined net outflows exceeding RMB 10 billion [$1.48 billion] over the past month.”
“The previously widely accepted investment view of 'buying on dips amid falling gold prices' has started to face divergence under current volatile market conditions,” they added.
Chinese gold equities listed in Hong Kong also declined sharply in a move characterized as ‘unusual.’
“Hong Kong-listed gold stocks broadly declined, with China National Gold International Resources and Jihai Gold down 3.6%, Zijin Mining falling 3.5%, Shandong Gold and Zhaojin Mining dropping nearly 3%, Zijin Gold International declining 2.4%, and Chifeng Gold, Lingbao Gold, China Silver Group, Zhufeng Gold, and Tongguan Gold also following lower,” the report noted.
China’s physical gold market has also cooled substantially from the white-hot demand seen at the start of the year when international and domestic gold prices were setting new all-time records on a near-daily basis.
The latest numbers from the Shanghai Gold Exchange (SGE) showed that gold withdrawals in May totaled only 63.5 tonnes – the lowest level since February of 2020 during the first wave of the COVID-19 outbreak, and around half of what they were in March of this year.
Industry professionals told Gelonghui Finance that “while short-term gold price volatility may persist, the core rationale supporting gold’s strategic allocation value remains intact over the medium to long term.”
