To The Moon

Global chaos is driving gold to new highs! China’s central bank just notched 16 straight months of gold buying, and physical demand remains strong even above $5,000/oz.

Do you think gold will keep surging amid geopolitical risks, or is a bigger pullback coming? Are you adding gold to your portfolio as a safe haven, or waiting for lower prices? Share your thoughts on the gold rally below!

$Gold - main 2604(GCmain)$ As geopolitical tensions rage and the global economic outlook darkens, gold’s safe-haven allure shines brighter than ever. The People’s Bank of China has demonstrated strategic foresight through concrete actions—in February, it increased its gold reserves for the 16th consecutive month, extending the current gold-buying cycle to new heights.

According to official data, China’s gold reserves rose by 30,000 ounces in February, reaching a total of 74.22 million ounces. This marks 16 uninterrupted months of increases since the cycle began in November 2024. Despite a temporary pullback in international gold prices in February, recent escalations in the Middle East conflict have pushed prices back above $5,000 per ounce. The PBOC’s decision to continue buying at relatively high levels underscores its unwavering confidence in gold’s long-term value.

Spot gold surged by over 8% in February, notching its seventh consecutive monthly gain. Elevated global political and economic uncertainty has driven capital into gold assets. While prices pulled back this week amid fading interest rate cut expectations and rising energy prices, they remained near $5,135 per ounce as of Friday. Every market correction is being seized by long-term investors as an entry opportunity.

Global Central Banks’ Gold-Buying Logic Remains Unchanged, China Leads the Surge

A World Gold Council report notes that global central bank gold purchases slowed slightly at the start of the year due to sharp price volatility. However, analyst Marissa Salim stated that price fluctuations may have temporarily dampened buying momentum for some central banks, but ongoing geopolitical tensions "are likely to keep central banks accumulating gold throughout 2026" to diversify reserves and hedge against global uncertainty.

Amid this global trend, China’s sustained purchases stand out. The 16-month consecutive growth cycle not only reflects China’s forward-looking judgment on the international situation but also its long-term consideration to optimize the structure of its international reserves.

Echoing the PBOC’s steadfast buying, physical gold demand within China has remained resilient. Despite gold trading at record highs, the premium for physical gold in the Chinese market hovered between $13 and $15 per ounce last week, slightly higher than the previous week. Peter Fung, Head of Trading at Wing Fung Precious Metals, noted that the stable premium indicates "physical demand in China remains very solid even above $5,000 per ounce. People are still buying gold as a long-term investment."

This phenomenon of "buying more as prices rise" reflects Chinese investors’ deep recognition of gold’s safe-haven properties. Against the backdrop of escalating global economic uncertainty, gold’s role as the ultimate "safe haven" has become increasingly prominent. Both central bank strategic reserve adjustments and ordinary investors’ asset allocation now regard gold as an indispensable component.

Conclusion

As global turmoil becomes the new normal, gold’s value has been reaffirmed. The PBOC’s 16 consecutive months of gold reserve increases are not only a rational choice to hedge external risks and optimize reserve structure but also a clear signal to the market: in turbulent times, gold remains a core asset worthy of long-term holdings. Faced with a complex and volatile international environment, China is taking concrete actions to build a more robust reserve system, laying a solid "ballast stone" for economic security.

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