China Central Bank Boosts Gold Holdings by Record Amount

China's central bank has increased its gold holdings for the 21st consecutive month, with a significant surge in purchases in July. The bank added 640,000 ounces of gold to its reserves that month, setting a new record for the current cycle.

The trend shows clear characteristics of 'counter-cyclical allocation,' where the central bank buys more gold when prices are low and sells when they're high. In January, it purchased just 40,000 ounces, but by July, that number had increased to 640,000 ounces.

Since November 2024, China's central bank has accumulated approximately 102 tonnes of gold. The bank's operations have been influenced by the global political and economic landscape, which has led to rising geopolitical risks and uncertainty surrounding the US dollar system.

The credibility of the US dollar is facing challenges due to expanding fiscal deficits and soaring military spending. The Federal Reserve's independence has also come under scrutiny following reports of private phone calls between officials and Trump. Against this backdrop, gold has become more strategically valuable as a reserve asset with 'no sovereign credit risk.'