PBOC Sees Gold Rush Amid Dollar Weakness Concerns

China's central bank has continued its buying streak, adding the most gold to its reserves since 2023. The People's Bank of China (PBOC) increased its holdings by 650,000 ounces in August, according to data released on Monday.

The surge in gold purchases comes as bullion prices rose almost 10% in August, driven by concerns about inflation and dollar weakness following the US Treasury's plan to ramp up buybacks of government debt. This has prompted investors to seek alternative stores of value such as gold.

Despite elevated bond yields remaining a headwind for gold in the near term, the PBOC's prolonged accumulation of bullion alongside other sovereign investors has reassured some gold bulls on the longer-term outlook.