Data released on February 7 by the People's Bank of China shows the country's gold reserves reached 74.19 million ounces at the end of January, up from 74.15 million ounces at the end of December. This marks the 15th consecutive month of increases in gold holdings.

The January increase of 40,000 ounces was slightly larger than the 30,000-ounce additions seen in each of the previous two months. According to statistics from the State Administration of Foreign Exchange, China's foreign exchange reserves stood at $3.3991 trillion as of the end of January 2026, an increase of $41.2 billion from the end of December 2025, representing a growth of 1.23%. In January 2026, influenced by factors including the fiscal and monetary policies of major economies and market expectations, the US dollar index declined, while prices of major global financial assets generally rose. The combined effect of currency translation and changes in asset prices contributed to the expansion of foreign exchange reserves that month. China's economy continues to demonstrate stable and progressive growth, with its resilience further highlighted, providing support for the overall stability of foreign exchange reserves. Gold finished the week at $4,961 per ounce, accumulating a weekly gain of 1.38%, although it remains more than 11% below its all-time high reached in January. However, financial analysis suggests that recent sharp fluctuations are likely a temporary correction within a longer-term upward trend.

Institutional strategists note that despite signals of potentially high valuations, the underlying drivers supporting gold prices—such as geopolitical tensions, uncertainty around trade policies, and concerns over debt levels—have not diminished. Analysis from several investment banks indicates that the current decline has not undermined the long-term investment thesis for gold. Instead, it may present a buying opportunity within this historic bull market. Russ Mould, Investment Director at AJ Bell, stated in a report on Monday that gold is currently in its third major bull market since 1971, noting that the previous two major rallies also experienced significant corrections along the way.