China Aggressively Buys the March Gold Dip

Highest purchase volume in over a year

GFN – BEIJING: China’s central bank increased gold reserves by approximately five metric tons in March, marking its largest monthly purchase in over a year and extending its accumulation streak to 17 consecutive months, even as bullion prices came under pressure during the Iran conflict.

The People’s Bank of China added roughly 160,000 troy ounces of gold in March, reinforcing its role as a steady source of demand in the global bullion market amid heightened geopolitical volatility and shifting rate expectations.

Official data showed China’s gold holdings rose to 74.38 million fine troy ounces, underscoring a continued policy-driven accumulation strategy despite recent price weakness.

“China’s central bank bought the most gold in more than a year in March, adding about 160,000 troy ounces.”

The purchases occurred during a period of significant market stress. Gold prices declined approximately 12% in March, marking the steepest monthly drop since 2008, as the Iran conflict strengthened the U.S. dollar and shifted expectations toward tighter Federal Reserve policy.

“Gold sank 12% in March — the worst monthly performance since 2008 — as the conflict boosted the US dollar and spurred bets the Fed wouldn’t cut rates.”

Despite the drawdown, spot prices stabilized following the reserve update, rising modestly to trade above $4,690 per ounce as market participants reassessed central bank demand dynamics.

The PBOC’s continued buying stands in contrast to selective selling activity elsewhere. Turkey’s central bank reportedly sold and swapped roughly 60 tons in March to support its domestic currency, highlighting diverging policy responses across emerging markets.

“Central-bank purchases have been a key feature of the global market… with many emerging-market economies increasing allocations to bullion as a hedge.”

Global official-sector demand remains structurally supportive. Central banks purchased an estimated net 25 tons of gold in the first two months of the year, according to the World Gold Council, with Poland accounting for the majority of February’s activity.

The persistence of Chinese accumulation, particularly during periods of price weakness, reinforces the view that official-sector demand continues to function as a stabilizing force within the gold market, even as macro conditions introduce short-term volatility.