China's central bank, the People’s Bank of China (PBOC), brought its relentless 18-month spree of gold acquisitions to a halt in May, coinciding with record-high spot gold prices. Despite this pause, the value of China’s gold reserves continued to climb, reflecting the buoyant market prices. As of the end of May, the reserves remained stable at 72.80 million troy ounces, amounting to $170.96 billion.

The decision to pause gold purchases aligned with a 1.4% decline in spot gold prices, which dipped to $2,342 per ounce, attributed to a preceding rally. However, the PBOC has yet to issue any official statements regarding this shift in strategy.

Commenting on the development, Ole Hansen, Saxo Bank’s head of commodity strategy, remarked, “China is nowhere near done buying gold, but the pause also highlights they are humans, balking at the prospect of paying record prices … Overall, gold is still consolidating, and the news will likely prolong that phase, but overall the long-term bullish outlook has not changed.”

Since 2000, China has pursued a strategic initiative to bolster its gold reserves, part of a broader economic diversification plan aimed at reducing reliance on the U.S. dollar and enhancing financial stability amid global economic dynamics. By 2022, China significantly ramped up its gold acquisitions, aligning with a global trend among central banks to fortify national economies in response to escalating inflation and persistent economic uncertainties.

In 2023, the People’s Bank of China emerged as the world's top official sector gold buyer, acquiring a record 7.23 million ounces — the largest annual purchase since records began in 1977, according to the World Gold Council. This concerted accumulation underscores China's extensive strategy to diversify and fortify its reserves, reinforcing its financial resilience amid evolving global economic landscapes.