China's PBOC Extends Gold-Buying Streak Amid Global Financial Volatility

China's central bank has continued its streak of buying gold, adding to its reserves for the 21st consecutive month. The People's Bank of China (PBOC) increased its official gold holdings by 640,000 ounces in July, bringing its total to 76.08 million ounces.

This growth in gold reserves comes amid global financial volatility and a renewed interest in increasing gold holdings among central banks worldwide. In the second quarter, central bank gold purchases saw a strong rebound, rising to 289 metric tons, up over 60% year-on-year and surpassing the historical average.

According to Ray Jia, head of research for Asia-Pacific excluding India at the World Gold Council, central banks are not primarily motivated by price factors when making gold purchases. Instead, they aim to hedge against geopolitical risks and pursue reserve diversification.

China's foreign exchange reserves also rose in July, increasing by $2.5 billion to reach $3.4188 trillion. The State Administration of Foreign Exchange attributed this growth to the decline of the US dollar index and mixed performance of major global financial assets.