As geopolitical tensions escalate and the global economic outlook darkens, gold’s safe-haven allure is once again coming to the fore. The People’s Bank of China (PBoC) has demonstrated strategic foresight through concrete action—extending its gold purchasing campaign for the 16th consecutive month in February, pushing the current accumulation cycle to new heights.
According to official data, China’s gold reserves increased by 30,000 troy ounces in February, bringing total holdings to 74.22 million troy ounces. This marks a full 16 months of uninterrupted accumulation since the current buying cycle began in November 2024. Despite international gold prices experiencing a correction in February, they have recently climbed back above the $5,000 per ounce threshold amid escalating Middle East conflicts. The PBoC’s decision to continue purchasing at relatively elevated price levels underscores its firm confidence in gold’s long-term value.
Spot gold surged more than 8% in February, marking its seventh consecutive monthly gain. Heightened global political and economic uncertainty continues to drive capital flows into gold assets. Although prices retreated this week amid diminishing rate cut expectations and rising energy costs, they remained near $5,135 per ounce as of Friday. Market observers note that each pullback is viewed by long-term investors as a buying opportunity.
The World Gold Council reports that global central bank purchasing activity slowed somewhat at the beginning of the year due to price volatility. However, analyst Marissa Salim suggests that while price fluctuations may have temporarily moderated some central banks’ buying pace, ongoing geopolitical tensions “are likely to keep central banks accumulating gold throughout 2026” as they seek to diversify reserves and hedge against global uncertainty.
Within this global trend, China’s accumulation campaign stands out as particularly noteworthy. The 16-month consecutive increase not only reflects Beijing’s forward-looking assessment of international conditions but also signals long-term considerations toward optimizing the country’s reserve composition.
Echoing the central bank’s steadfast accumulation, physical gold demand within China continues to demonstrate robust resilience. Despite historically high price levels, premiums in the Chinese market remained steady at $13-$15 per ounce over international benchmark prices last week, slightly higher than the previous week’s levels. Peter Fung, head of dealing at Wing Fung Precious Metals, noted that the stable premium indicates “even with gold prices above $5,000, physical demand in China remains very steady. People continue to buy gold for long-term investment.”
This phenomenon of “buying more as prices rise” reflects Chinese investors’ deep-seated conviction in gold’s safe-haven attributes. Against a backdrop of intensifying global economic uncertainty, gold’s role as the ultimate safe-haven asset grows increasingly pronounced. Both the central bank’s strategic reserve adjustments and ordinary investors’ asset allocation decisions now place gold in an indispensable position.
As global instability becomes the new normal, gold’s value proposition is being reaffirmed. The PBoC’s 16 consecutive months of gold accumulation represents both a rational choice to hedge external risks and optimize reserve structure, while also sending a powerful signal to markets: in turbulent times, gold remains a core asset worth holding for the long term. Facing a complex and evolving international environment, China is taking concrete steps to build a more robust reserve system, laying a solid foundation for economic security.
