China’s PBOC extends gold buying as Middle East tension simmers

[SINGAPORE] China’s central bank bought more gold in February, extending its streak of purchasing to 16 months, as bullion climbs amid escalating Middle East tensions.

Gold held by the People’s Bank of China (PBOC) rose by 30,000 troy ounces last month to 74.22 million fine troy ounces, according to data released on Saturday (Mar 7). The purchase extends the latest round of accumulation that began in November 2024.

Despite recent declines, gold has gained over the past few weeks, clawing its way back above US$5,000 an ounce. Investors were seeking safer assets after the US and Israel attacked Iran, intensifying geopolitical risks in the Middle East.

Global central banks’ gold purchases slowed at the start of the year, as heightened volatility weighed on appetite, according to a note from the producer-funded World Gold Council (WGC) this week. Net buying, led by Central and East Asian countries, totalled five tonnes in January, compared with a 12-month average of 27 tonnes.

“Volatile gold prices and the holiday season may have given some central banks pause,” Marissa Salim, an analyst from WGC, wrote in the note. “Though geopolitical tensions, which have shown little sign of abating, are likely to keep accumulation going through 2026 and beyond.”

Some countries have also sold gold recently, but buying still outweighs sell-offs. The head of Poland’s central bank, the world’s biggest reported buyer of bullion, laid out a proposal to sell gold reserves to finance defence spending, whereas both Russia and Venezuela’s central banks have sold gold in recent months. BLOOMBERG