China’s Forex Reserves Surge, Gold Holdings Grow for Eighth Month

China’s foreign exchange reserves soared to $3.3174 trillion by June 2025, marking a $32.2 billion (0.98%) increase from May and sustaining a 19-month streak above $3.2 trillion, according to official data from the State Administration of Foreign Exchange (SAFE). The People’s Bank of China (PBC) also bolstered its gold reserves for the eighth consecutive month, reaching 73.9 million ounces (2,298.55 tons), up 70,000 ounces from May. The rise in reserves was driven by a 2.5% drop in the US Dollar Index to a three-year low of 96.9, boosting non-US currency values, alongside rising global financial asset prices, as reported by SAFE.

China’s robust economic growth and resilient foreign trade continue to underpin reserve stability, despite a complex global environment marked by weakening economic momentum and market volatility, said Wen Bin, chief economist at China Minsheng Bank. Growing concerns over U.S. fiscal and monetary policies, coupled with the dollar’s politicization, have eroded its credibility, further elevating gold’s appeal as a safe haven.

Global central banks purchased 244 tons of gold in Q1 2025, continuing a trend of over 1,000 tons annually for three years, per the World Gold Council, driven by geopolitical and economic uncertainties. Analysts warn that escalating U.S. tariff policies, with statements expected to be delivered to trade partners, could further boost gold demand, with spot gold hitting a record $3,500.05 per ounce last April. Experts recently revised 2025 gold price forecast to $3,215 per ounce, reflecting heightened global tensions and China’s strategic reserve accumulation.