China's gold reserves rose for the 20th consecutive month in June 2026, reaching 75.44 million troy ounces despite a decline in gold prices. The move underscores ongoing central bank demand amid global economic uncertainty.
China's Gold Reserves Climb Despite Falling Prices
China's official gold reserves increased to 75.44 million troy ounces at the end of June 2026, up from 74.96 million ounces in May, marking the 20th straight monthly rise. However, the value of these reserves fell to $303.72 billion from $340.75 billion in May, reflecting a four-month decline in gold prices—the longest such streak since July-October 2022. The drop in valuation highlights the impact of sustained price weakness, even as central banks globally continue accumulating bullion.
Central Bank Demand Remains Resilient
While central bank gold purchases have cooled since early 2026, China's persistent buying signals strategic positioning amid geopolitical tensions and monetary policy uncertainty. The World Gold Council estimates suggest China's actual holdings may exceed official figures, potentially doubling reported reserves. This discrepancy underscores the opaque nature of sovereign gold accumulation strategies.
Implications for Forex Traders
The ongoing gold purchases by China could weigh on the US dollar (DXY) if they reflect broader diversification away from dollar-denominated assets. Gold's inverse relationship with the dollar and real yields remains critical for XAUUSD traders. A sustained decline in real yields, driven by dovish central bank policies, may support gold prices despite current headwinds. Traders should monitor upcoming US CPI data and Federal Reserve communications for cues on rate trajectory.
Technical Context and Risk Sentiment
Gold prices have faced downward pressure from elevated real yields and a firmer dollar in 2026. However, China's continued accumulation may signal long-term confidence in bullion as a reserve asset. Risk sentiment remains cautious, with equity markets volatile amid mixed global growth signals. A break below key support levels in XAUUSD could accelerate losses, while a reversal in real yields might trigger a rebound.
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