China Just Bought Gold at the Worst Time, And They Want Even More

In perhaps the least surprising move, it turns out that central banks just bought more gold in a single quarter than ever before.

But we’ve seen this before, haven’t we? I know the veteran members of our investment community here might’ve just rolled their eyes in a “here we go again” way. 

What’s interesting, however, is that they made their buys during the worst quarter for gold prices in ten years.

Not after the crash, folks.

Through it.

And there was one buyer who led the way in a manner that should stop you cold.

The numbers don’t lie. 

In June alone, gold prices plunged nearly 12%, briefly dipping below $4,000 an ounce. Worst monthly decline in over a decade.

That same month, the People’s Bank of China bought 14.93 tonnes of gold.

For the record, this was officially the largest single-month purchase since 2023.

It was also the 20th consecutive month of buying — currently the longest streak China’s central bank has run since 2015.

So, while everyone else in the market was nursing losses, Beijing was over there writing checks.

But if we zoom out and look at the bigger pattern here, things get even more remarkable. 

You see, that 20-month streak began back in November 2024, and has run straight through every single Fed rate decision, every tariff announcement, and every “de-escalation” headline since. 

In other words, nothing has interrupted that gold grab… not once!

To be fair, China’s not buying alone, either. 

Across the broader second quarter, central banks acround the globe scooped up about 289 tonnes of gold, which is the most ever recorded for a second quarter, AND during a quarter when gold fell roughly 16%. 

Poland added 51 tonnes, bringing its own reserves to 632 tonnes, and China’s contribution alone was around 33 tonnes for the quarter, its biggest since late 2023.

But the reason why this is so peculiar is because even after 20 straight months of accumulation, gold still makes up less than 9% of China’s total reserves. 

Compare that to the global central bank average, which sits closer to 27%. Make no mistake, that gap is enormous. 

It also means Beijing isn’t close to finishing its buying spree. If China simply moved toward the average allocation other central banks already hold, it would need to buy for years longer at this pace, regardless of where the price sits next quarter.

Their motive isn’t exactly a secret. 

Most people would tie this campaign to de-dollarization — a direct response to watching roughly $300 billion of Russia’s dollar reserves get frozen after 2022. 

That was the moment every major reserve manager on Earth learned the hard way that dollar assets can be seized.

However, the gold that’s sitting in your own vault can’t.

That’s the intriguing part (for me, at least), because reserve managers don’t trade gold on momentum, and they certainly don’t panic-sell into a dip.

These guys buy with decades in mind. When the price experiences a normal and healthy correction, it’s not a warning sign to them — it’s a discount!

Don’t mistake any of that for a one-quarter fluke, either. 

Remember, central banks have averaged roughly 1,000 tonnes of gold purchases a year for four straight years running. That’s double the average pace of the entire decade before it.

The data backs that up, too. Keep in mind that a record 43% to 45% of central banks told the World Gold Council they plan to add more gold to their reserves over the next twelve months. 

Again, that’s the highest reading in the survey’s history, and nearly all of them — somewhere between 89% and 95%, depending on which survey you look at — expect total global reserves to keep climbing.

Trust me, when the world’s most sophisticated reserve manager buys its biggest single month in years, in the worst month for prices in a decade, that’s not noise.

That’s your signal.

Gold’s New Job

If you’re thinking that there’s a structural case underneath this story, you’re right. 

And more importantly, that bullish sentiment isn’t simply going away after the next Fed meeting. 

Throughout all of this, mine production has remained stubbornly flat, only growing 1% to 2% a year. Companies can’t just snap their fingers and decide to dig more gold out of the ground next quarter. You and I both know all too well that new mines take a decade or more to bring online.

So, we’ve got demand accelerating against supply that barely moves — that’s as structural as it gets. 

And yet, gold’s actual role is quietly changing and increasingly being treated as Tier 1 working collateral — usable in lending markets, generating yield in ways it never used to. 

The old knock against gold that just sits there collecting dust is getting weaker with every ounce that moves into the central banks’ vaults. 

Listen, gold has had a wild ride this year… there’s absolutely no mistaking that fact. 

Prices were up as much as 95% over twelve months back in January, touching an all-time high near $5,600/oz before undergoing that hard correction. 

Today, it’s found a bit of support around $4,000/oz and is trying to find some momentum near $4,200/oz as headlines about a possible Hormuz deal ease inflation fears.

I say let the day traders chase that noise.

Why? Well, because central banks aren’t watching the headlines, they’ve been concentrating on the same thing for the last four years. 

And they just showed us, in the worst quarter in a decade, exactly what conviction looks like.

Now I want you to look a little further down the road.

How do you play the same side of this trade that Beijing and Warsaw are already on?

Sure, you could do it the central bankers’ way by collecting bars and letting them sit in a vault as storage fees eat into your position every single year you hold it.

But hey, that playbook is thousands of years old, and it comes with thousands of years of conflict built in.

You know as well as I do that this is where gold’s evolution comes into play. 

Naturally, I’m referring to digital gold — specifically, tokens backed one-to-one by independently verified gold deposits, still sitting in the ground. In one fell swoop, individual investors like us are able to sidestep those mining costs and storage fees. 

We’re talking about a direct, cryptographically verified claim on real, audited ounces — tradable 24/7, transferable anywhere on the planet in seconds, and buyable in fractions instead of forcing you into a full ounce at a time.

I think it’s time you check out the full details for yourself right here.

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