China continued to strengthen its strategic gold holdings in June, extending its bullion accumulation to a 20th consecutive month even as international gold prices recorded their sharpest monthly decline since 2008. The sustained purchases by the People’s Bank of China (PBoC) underscore the country’s long-term reserve diversification strategy amid ongoing global economic and geopolitical uncertainties.

The PBoC increased its gold reserves by 480,000 fine troy ounces—equivalent to nearly 15 metric tonnes—during June, taking total holdings to 75.44 million fine troy ounces. This represents the central bank’s largest monthly acquisition since October 2023, and highlights continued institutional confidence in gold as a strategic reserve asset despite short-term market volatility.

While physical holdings increased, the market value of China’s gold reserves declined significantly due to falling bullion prices. The value of reserves stood at US$303.72 billion at the end of June, down from US$340.75 billion in May, reflecting the impact of gold’s steep monthly price correction.

Gold prices are currently trading within a consolidation range as investors await fresh guidance from the U.S. Federal Reserve on the future trajectory of monetary policy. Market participants are closely monitoring the release of the minutes from the Federal Reserve’s June 16–17 policy meeting, which are expected to provide greater clarity on interest rate expectations under Federal Reserve Chair Kevin Warsh.

According to Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, recent price action indicates that bullion is establishing a technical support base. He noted that investors are largely positioning themselves ahead of the Fed minutes, which could influence expectations for short-term interest rates and, consequently, the outlook for precious metals.

Investment bank JPMorgan has maintained a measured outlook for gold through the remainder of 2026, citing softer-than-expected demand across key consuming sectors. The bank believes that while gold retains its long-term appeal, near-term upside may remain limited without stronger investment or central bank demand.

JPMorgan projects average gold prices of approximately US$4,300 per ounce in the third quarter, rising modestly to around US$4,500 per ounce in the fourth quarter, suggesting a gradual recovery rather than a sustained rally.

Outlook

China’s continued accumulation of gold reserves reinforces the strategic importance central banks continue to place on the precious metal, even during periods of price weakness. With global markets awaiting critical signals from the U.S. Federal Reserve and analysts forecasting a measured recovery in bullion prices, central bank purchases are expected to remain a key pillar supporting the long-term gold market.