China Hikes Gold Holdings to Record High Amid Dollar Weakness

China's central bank has continued to increase its gold holdings, adding 650,000 ounces to reach a record high of 76.73 million ounces at the end of August. This marks the 22nd consecutive month of growth and the largest monthly addition since October 2023.

The People's Bank of China also reported that China's foreign exchange reserves stood at $3.44 trillion at the end of August, a 0.57% increase from the previous month. The reserves have remained above $3.4 trillion for five consecutive months, with the increase attributed to a weaker U.S. dollar and exchange-rate revaluation of non-dollar assets.

Analysts say investors are turning to gold as an alternative to the dollar amid concerns over inflation following the U.S. Treasury's announcement of an expansion in Treasury buybacks. Despite international gold prices surging about 10% in August, the central bank continued to increase its purchases.