China increased its gold reserves for the 10th consecutive month, expanding its reserve diversification efforts to move away from the U.S. dollar.
Bullion held by the People's Bank of China rose by 930,000 troy ounces in August, the central bank said Thursday. That's equivalent to about 29 tons. Total reserves now stand at 2,165 tons, with about 217 tons added in a series of purchases that began last November.
Asia's largest economy has been among the most active buyers of gold recently as it focuses on ways to diversify its foreign exchange reserves. The massive purchases have helped support prices despite rising interest rates around the world, which typically undermine demand for non-interest-bearing metal bullion.
At the same time, the concentration of supply in China has made the precious metal vulnerable to any potential shift in demand. Other countries' central banks are expected to reduce purchases this year after record purchases in 2022.
For now, Beijing's appetite for bullion remains constant. The country's appetite for gold is linked to broader global moves to reduce reliance on the U.S. dollar. President Xi Jinping has strengthened ties with his BRICS counterparts as the bloc seeks to conduct more trade among themselves in their own currencies.
The NBK purchases are the longest since a 10-month period ending in September 2019. Before that, the last wave of inflows ended in late 2016.
Meanwhile, China's total foreign exchange reserves totaled $3.1601 trillion by the end of August, down $44.2 billion from the end of July, Bloomberg calculations show.