China’s central bank has increased its gold reserves for the 15th straight month. On February 7, the latest data released by the State Administration of Foreign Exchange showed that as of the end of January 2026, China's foreign exchange reserves stood at $3.3991 trillion, an increase of $41.2 billion from the end of December 2025—a rise of 1.23%—marking a new ten-year high. Official reserve assets data released on the same day also indicated that China's official gold reserves reached 74.19 million ounces by the end of January 2026, up by 40,000 ounces from the end of December 2025, extending the streak of monthly increases to 15 months.
Foreign exchange reserves have now remained above $3.3 trillion for six consecutive months. Commenting on the continued month-on-month rise in January's foreign exchange reserves, the foreign exchange authority noted that factors including fiscal policies, monetary policies, and market expectations in major economies contributed to a decline in the U.S. dollar index and an overall increase in global financial asset prices. Combined effects from currency translation and asset price fluctuations led to the expansion of foreign exchange reserves during the month.
In January, the U.S. dollar remained weak amid multiple overlapping factors, with elevated credit risks. Hawkish signals from Federal Reserve officials, coupled with expectations of a new Fed chair appointment, led to volatile upward movements in U.S. Treasury yields and a general rise in global asset prices.
Wen Bin, chief economist at China Minsheng Bank, stated that the $41.2 billion increase in foreign exchange reserves at the end of January was influenced by both asset price changes and exchange rate fluctuations. In terms of exchange rates, the U.S. dollar index fell by 1.4% to 97.0 in January, briefly dipping to around 95—a four-year low. Non-U.S. currencies generally appreciated, with the Japanese yen, euro, and British pound rising by 1.23%, 0.9%, and 1.6% against the dollar, respectively. On the asset price front, the yield on the ten-year U.S. Treasury note rose by 8 basis points to 4.26%. Global stock markets showed overall strength with volatility: the S&P 500 increased by 1.4% month-on-month, the Euro Stoxx Index rose by 3.4%, and the Tokyo Nikkei Index climbed by 5.9%.
Pang Meng, a senior research fellow at the National Institution for Finance and Development, noted that the recovery in foreign exchange reserves was partly due to valuation gains from the appreciation of major non-U.S. currencies against the dollar and mixed performance of financial assets. It also reflects relatively balanced cross-border payments, moderate foreign exchange purchase demand from businesses and households, and stabilizing market expectations for the renminbi exchange rate.
Wen Bin added that with ongoing policy measures to facilitate cross-border investment and financing, the attractiveness of China’s capital market to foreign investors will continue to grow. The stable and progressive performance of China's economy, along with its growing resilience, provides strong support for maintaining the stability of foreign exchange reserves.
In January, the London spot gold market experienced significant volatility, rising initially before declining. Despite sharp fluctuations in international gold prices, the People's Bank of China maintained its monthly accumulation pattern.
By the end of January 2026, China’s official gold reserves reached 74.19 million ounces, an increase of 40,000 ounces from the end of December 2025. This pace of accumulation has remained below 100,000 ounces per month since March 2025.
Pang Meng pointed out that over the past year, central banks worldwide have generally increased their gold allocations to hedge against volatility in U.S. dollar assets and diversify geopolitical risks. The PBOC’s 15 consecutive months of gold purchases reflect a clear intent to raise the proportion of “non-credit assets” within its foreign reserve structure. It also signals that, amid accelerating adjustments in the global monetary system, official institutions are placing greater emphasis on the safety and long-term stability of reserve assets.
A recent report from the World Gold Council on gold demand trends for the fourth quarter and full year of 2025 noted that gold’s performance in 2025 “solidified its standing among central banks, investors, and consumers.” The structural impact of this trend is expected to continue into early 2026. The council’s data also revealed that global physical gold demand surpassed 5,000 tonnes for the first time in history in 2025, reaching a record high, with gold prices setting new records in 53 trading sessions. Central bank gold purchases remained at historically high levels throughout 2025, well above long-term averages. Structural factors such as high debt levels, persistent geopolitical risks, and declining confidence in traditional reserve assets are expected to continue driving central bank gold buying.
Pang Meng suggested that in response to a volatile and uncertain international environment, the PBOC’s strategy of making small, frequent purchases helps smooth market fluctuations, capture favorable cost windows, and mitigate the price impact of large one-off purchases. This approach not only hedges against global macroeconomic risks in advance but also provides “official expectation” signals at critical moments, serving as a stabilizing mechanism for market expectations.
Looking ahead, Pang Meng anticipates that, from the perspectives of optimizing the international reserve structure, steadily advancing the internationalization of the renminbi, and adapting to changes in the global environment, continued gold accumulation by the central bank will remain a key direction.