Investment demand fuels China's gold buying
Households viewing physical bullion as safe-haven asset, store of wealth
Even with changing buying patterns, China retains its title as the world's largest gold consumer, with total household gold demand dwarfing that of the United States and European markets combined.
Gold's status in Chinese policy documents has undergone a meaningful upgrade. Under mounting global geopolitical and trade uncertainties, Chinese authorities have re-defined gold not merely as a commodity or financial asset, but as a "strategic mineral" underpinning national financial and industrial security.
Released last year by nine central government departments including the National Development and Reform Commission and the Ministry of Industry and Information Technology, the Gold Industry High-Quality Development Action Plan 2025-2027 marks this policy turning-point.
According to the S&P Global analysis, China's gold-related policies serve long-term objectives: bolstering domestic economic resilience and expanding the global usage of the renminbi.
Progress will likely unfold gradually, underpinned by consistent policy commitment rather than short-term, opportunistic moves, it said.
According to the China Gold Association, China added 40.12 tons of gold in the first half, lifting its official reserves to 2,346.45 tons — the fifth-largest stockpile globally. Despite this scale, S&P Global notes that gold represents just 6.7 percent of China's total official reserves, trailing significantly behind median allocations in developed markets (16.6 percent) and African nations (17.5 percent).
This gap creates underlying sentiment for further gold accumulation, either through central-bank spot purchases or expanded domestic and overseas mine output, it said.
According to the People's Bank of China, China's gold reserves grew by over 40 tons in the first half of 2026 — more than double the 19 tons in the first half of the previous year.
The buying spree coincided with fresh regional conflicts and sharp swings in international gold prices. It also aligns with a worldwide trend: emerging-market central banks across Africa, Latin America and Asia have ramped up gold reserves since 2022, while developed-market physical stockpiles have stayed largely flat.
According to Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, higher gold reserves can strengthen confidence in the renminbi as a sovereign currency and support its gradual internationalization.
The necessity of increasing gold holdings is rising from the perspective of optimizing the country's international reserve structure, Wang added.
Despite China's total official reserve assets sitting at roughly $4 trillion, its gold reserves remain relatively low in both absolute terms and as a share of total assets compared to major global economies, said Zhao Qingming, a specialist in international finance.
Pointing to the growing momentum of global de-dollarization, Zhao believes that with US dollar assets facing certain risks, moderately trimming dollar holdings in favor of gold is a logical safe-haven strategy.
While international gold prices have surged in recent years, global mine output has remained largely stagnant. Average lead time for new gold projects from discovery to commercial production has stretched to 17.5 years for 2020-25 projects, nearly doubling from the 10.6-year average seen in 2000-09, according to S&P Global.
