China’s Forex Reserves Rise to $3.44 Trln; Gold Buying Up
China’s foreign exchange reserves rose to $3.442 trillion at the end of May 2026, up $31.7 billion from the previous month, according to official data released on Sunday by the State Administration of Foreign Exchange (SAFE). The People’s Bank of China also extended its gold purchasing streak to a 19th consecutive month, with the pace of acquisitions accelerating sharply.
Reserve Stability Amid Global Volatility
The May increase of $31.691 billion — a 0.93% gain — brought reserves to $3,442.238 billion, following a volatile year that saw a sharp $85.7 billion contraction in March and a $68.4 billion rebound in April. According to Xinhua News, SAFE attributed the rise to a combination of exchange rate conversion effects and rising prices of major global financial assets, noting that the US dollar index increased during the month.
“China’s economy maintains a steady and progressive development trend, with high-quality development advancing solidly, providing support for the basic stability of foreign exchange reserves,” a SAFE official said, as reported by The Paper.
Gold Purchases Accelerate at Record Pace
The central bank’s gold reserves reached 74.96 million ounces (approximately 2,331.52 tonnes) at the end of May, up 320,000 ounces (about 9.95 tonnes) from April’s 74.64 million ounces. This marks the 19th consecutive month of gold accumulation since November 2024.
What stands out is the accelerating pace of purchases. Data from Wall Street CN shows that monthly gold additions have climbed steadily from just 30,000 ounces in February to 160,000 ounces in March, 260,000 ounces in April, and 320,000 ounces in May — more than a tenfold increase in three months.
China’s total official reserve assets stood at $3.851 trillion as of May, with the USD valuation of its gold holdings reaching $340.752 billion. Gold now accounts for approximately 9% of China’s total official reserve assets.
Global Context: Gold Surpasses US Treasuries
China’s sustained gold buying is part of a broader global shift. According to the European Central Bank’s June 2026 “International Role of the Euro” report, cited by CNGold, gold has surpassed US Treasuries to become the world’s largest reserve asset, accounting for 27% of global official reserves compared to 22% for US Treasuries and 15% for the euro.
The ECB report noted that gold’s rising share is partly driven by valuation effects — gold prices surged approximately 30% in 2024 and 60% in 2025, mechanically inflating the USD value of existing holdings. Nevertheless, central bank buying remains robust: global central banks purchased roughly 850 tonnes of gold in 2025, below the 1,000+ tonne levels of 2022-2024 but still well above historical averages.
In April 2026, global central banks returned to net purchasing with approximately 17 tonnes net bought, reversing March’s 30 tonnes of net selling. Poland led with 14 tonnes, followed by China (8 tonnes) and the Czech Republic (2 tonnes).
Strategic Implications
China’s accelerating gold acquisitions reflect a deliberate strategy of diversifying away from dollar-denominated assets — a trend that has gained momentum since the Russia-Ukraine conflict in 2022 highlighted the risks of financial sanctions. As the largest cumulative gold buyer since 2022 with over 350 tonnes purchased, China is at the forefront of a broader BRICS+ and Global South movement to reduce dependency on the US-dominated financial system.
The accelerating pace of purchases — from 30,000 ounces in February to 320,000 ounces in May — signals growing conviction in Beijing’s diversification strategy. This shift is not occurring in isolation. Poland, the second-largest gold buyer globally, has accumulated 320 tonnes since 2022 and recently announced plans to add a further 105 tonnes. Turkey and India have also been significant purchasers, adding 220 tonnes and 130 tonnes respectively over the same period.
However, the ECB report also cautioned that gold has inherent limitations as a reserve asset: it generates no interest, carries high price volatility, incurs storage and insurance costs, and has rigid supply that cannot expand to meet liquidity needs. The US dollar still dominates the international monetary system, accounting for approximately 57% of global foreign exchange reserves, with the euro at roughly 20%.
What to Watch
Market observers will be watching whether the PBOC continues to accelerate its gold purchases or moderates the pace given gold prices near $4,470 per ounce. China’s gold-to-total-reserves ratio of roughly 9% remains well below that of many other major economies — Poland’s gold represents about 30% of its reserves, while Uzbekistan’s stands at 88% — suggesting ample room for further accumulation.
The trajectory of US-China trade tensions and global economic conditions will also influence Beijing’s reserve management strategy in the months ahead. With China’s forex reserves remaining comfortably above the $3 trillion threshold, the country maintains a substantial buffer against external shocks while pursuing what appears to be a long-term strategic shift toward a more diversified reserve portfolio.