China continues to buy record amounts of gold. In the first eight months of the year, China imported more than 1,000 tons, worth a record 158.8 billion won. It had made significant purchases before that as well.

China is buying gold in record quantities.

Between January and August of this year, China imported more than 1,000 tons of gold, worth a record $158.8 billion. Previously, China imported 886 tons of gold in 2025, worth $96.5 billion. This suggests that China has purchased as much gold in just a few months this year as it did in a full year in 2025.

According to CNBC data, the People's Bank of China (PBOC) purchased nearly 23 tons of gold in September, its largest single-month purchase in the past three years. This marked the central bank's 23rd consecutive month of purchases. This surge in Chinese gold purchases comes at a time when gold demand in India is already high due to Dhanteras and Diwali.  

Why is China collecting so much gold?

According to a CNBC report, Julius Baer Group analyst Carsten Menke says that China's gold buying is partly the result of efforts to reduce its dependence on the US dollar.

Following Russia's invasion of Ukraine in 2022, the US and European countries froze Russia's foreign exchange reserves, amounting to approximately $300 billion. Consequently, Russia was unable to use this frozen money to repay foreign debt or import essential goods from other countries.

To keep a country's currency stable, that country's central bank uses its foreign exchange reserves. However, the freeze prevented Russia's central bank from intervening in the market to protect its currency, the Russian ruble.

As a result, its value fell sharply against the dollar. Learning from this, China is rapidly accumulating gold by selling US bonds to reduce its dependence on the dollar, as solid gold cannot be digitally frozen.

Moreover, China has also reduced its stake in US government debt. According to CNBC data, its holdings in US Treasuries fell to an 18-year low of $618 billion in July.

Impact on India

Gold prices in India are influenced by international rates, currency fluctuations, and domestic factors, so it's possible that China's massive buying during the festive season could lead to a surge in gold prices in the country. However, this is not guaranteed.

US Consumer Price Index (CPI) data is due this week, which will determine the policy stance of the Federal Reserve.

If inflation in the US appears stronger than expected, the Federal Reserve will be forced to keep interest rates high, which will help determine gold prices in the future.