Official data released on May 7th shows that as of the end of April 2026, China's foreign exchange reserves have climbed back above $3.4 trillion. The central bank's gold reserves have increased for the 18th consecutive month, with the scale of the April purchase reaching its highest level in nearly 14 months. Combined with a 4.41% year-on-year increase in domestic gold consumption for the first quarter, three key signals—stable foreign reserves, central bank accumulation, and rising consumption—point to robust conditions in the gold market.
Foreign exchange reserves have returned to a level above $3.4 trillion. Data indicates that by the end of April 2026, China's foreign exchange reserves stood at $3,410.5 billion, an increase of $68.4 billion, or 2.05%, from the end of March. The State Administration of Foreign Exchange stated that in April 2026, influenced by macroeconomic data, monetary policies of major economies, and related expectations, the U.S. dollar index declined, and the performance of global major financial asset prices diverged. Factors including exchange rate translation and changes in asset prices contributed to the increase in the foreign exchange reserve scale for that month. China's ongoing efforts to consolidate and expand its positive economic momentum, along with enhanced resilience and vitality, are conducive to maintaining the basic stability of foreign exchange reserves.
Wang Qing, Chief Macro Analyst at Dongfang Jincheng, noted that China's foreign exchange reserves at the end of April are near a ten-year high. The month-on-month increase in April was the largest in nearly 28 months, primarily driven by the dual factors of a falling U.S. dollar index and a significant rise in global financial asset prices during the month. "Measured by different standards, a foreign exchange reserve level above $3.4 trillion is considered relatively ample," Wang Qing stated. He believes that in the context of increasing volatility in the external political and economic environment, a moderately ample reserve level can provide crucial support for maintaining the RMB exchange rate at a reasonable and balanced level, serving as a stabilizing force against various potential external shocks.
The central bank has increased its gold holdings for 18 consecutive months. Data shows that gold reserves at the end of April were reported at 74.64 million ounces, an increase of 260,000 ounces from the previous month. This marks the 18th consecutive month of gold purchases since the central bank resumed buying in November 2024. Specifically, in the first four months of this year, the central bank increased its holdings by 40,000 ounces, 30,000 ounces, 160,000 ounces, and 260,000 ounces of gold, respectively. The pace of purchases accelerated in April, reaching the highest level in nearly 14 months. In terms of gold price performance, gold futures and spot prices saw consecutive gains in January and February, followed by consecutive declines in March and April.
Wang Qing explained that the evolving situation in the Middle East significantly pushed up international oil prices, while expectations for global monetary easing, including potential Federal Reserve rate cuts, cooled. International gold prices fell for the second consecutive month in April, which may be a direct reason for the central bank's accelerated gold purchases during the month. "The fundamental reason for the central bank's continued gold purchases in the recent period is the emergence of new changes in the global political and economic landscape," Wang Qing said. This implies that, despite gold prices being at historical highs, the necessity to increase gold holdings has risen from the perspective of optimizing the international reserve structure. Furthermore, as gold is a globally accepted ultimate means of payment, central bank purchases can enhance the credit of sovereign currencies and create favorable conditions for the steady and prudent advancement of RMB internationalization. Considering various factors, the central bank is likely to continue increasing its gold holdings in the future.
In early May, gold prices came under pressure and briefly fell to around $4,500 per ounce due to the Federal Reserve's hawkish policy stance. However, since May 5th, gold prices have resumed their upward trend. As of the time of writing, COMEX gold was quoted at $4,761.6 per ounce, up 1.43%, while London gold was quoted at $4,736.32 per ounce, up 0.96%. Shenyin Wanguo Futures believes that, from a medium to long-term perspective, the price center for precious metals has a foundation for sustained upward movement. On one hand, the center of geopolitical risk has risen, and the restructuring of the global political and economic order continues. On the other hand, market concerns about the sustainability of U.S. fiscal policy are intensifying, and frequent interventions by former President Trump in the Federal Reserve's independence are expected to sustain the process of de-dollarization, with the trend of global central banks increasing gold reserves continuing.
Gold consumption increased by 4.41% year-on-year. According to the latest statistics from the China Gold Association, in the first quarter of 2026, domestic gold production from raw materials was 81.065 tons, a decrease of 6.178 tons or 7.08% year-on-year. Gold production from imported raw materials was 55.165 tons, an increase of 1.578 tons or 2.94% year-on-year. Total gold production from domestic and imported raw materials was 136.230 tons, a decrease of 4.600 tons or 3.27% year-on-year. In the first quarter of 2026, gold industry mines and refineries conducted concentrated safety inspections and hazard investigations on various production facilities, with some enterprises undergoing mandatory maintenance shutdowns. These control measures affected domestic gold production to some extent during the quarter. Meanwhile, industry resource integration continues to advance. Zijin Mining Group announced plans to acquire equity in Chifeng Gold, further consolidating high-quality resources. Large gold groups saw strong performance in overseas production capacity release, achieving mine gold production of 24.173 tons in the first quarter, a year-on-year increase of 30.77%.
In the first quarter of 2026, China's gold consumption was 303.292 tons, a year-on-year increase of 4.41%. This includes 84.620 tons of gold jewelry, a year-on-year decrease of 37.10%; 202.062 tons of gold bars and coins, a year-on-year increase of 46.40%; and 16.610 tons for industrial and other uses, a year-on-year decrease of 7.43%. Influenced by high and volatile international gold prices, domestic gold jewelry consumption continues to face pressure, with consumption volume declining further. At the same time, gold investment demand remains strong, with gold bars and coins becoming popular investment categories, and sales volumes through bank channels increasing significantly. Additionally, high gold prices have raised the cost of gold for industrial enterprises, leading to a certain degree of decline in demand from this sector.
In the first quarter of 2026, domestic gold ETF holdings increased by 50.438 tons, a growth of 114.88% compared to the first quarter of 2025. By the end of March 2026, domestic gold ETF holdings stood at 298.289 tons. In the first quarter of 2026, China increased its gold reserves by 7.15 tons. As of the end of March, China's gold reserves totaled 2,313.48 tons, moving up one position globally to rank 5th.
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