China resumes gold purchases after US election

China has increased its gold holdings again since the US election in November 2024. The People’s Bank of China (PBOC) revealed that gold holdings increased for five consecutive months at the end of March. China is increasing its gold holdings as a safe asset due to the increasing uncertainty caused by the trade war launched by US President Trump.

The details of foreign exchange reserves released by the People’s Bank of China at the end of March showed that gold reserves increased by 0.1% since the end of February, to about 2,292 tons. From November 2022 to April 2024, China’s gold reserves increased for 18 consecutive months, and remained flat from May to October. It began to increase again in November 2024, and increased by 28 tons by the end of March 2025.

After Russia’s attack on Ukraine in February 2022, the trend of countries shifting funds from the US dollar to gold became obvious. Even in the face of concerns about the deterioration of geopolitical risks, the value of gold as a physical asset is not easily damaged.

China has also increased its holdings of gold that can support the credit of the RMB in response to the rapid changes in the international situation. The United States and China have been playing the game of increasing tariffs since February.

While China is increasing its gold holdings, it is also reducing its holdings of U.S. Treasuries. Statistics from the U.S. Treasury Department show that the amount of U.S. Treasuries held by China at the end of January 2025 was $760 billion, about $8 billion less than in November 2024. Some analysts believe that Japan is also reducing its holdings of U.S. Treasuries, seemingly worried about the inflation risks brought by the Trump administration.

There is also a view that China’s increase in gold holdings is assuming an emergency in Taiwan. It has formed a situation that is not easily hit by U.S.-led sanctions. Previously, Europe and the United States froze Russia’s dollar assets as a sanction for its attack on Ukraine.

In Europe, there are also voices expressing concerns about European gold kept by the United States. In an interview with Germany’s Bild, Felber, a German-born member of the European Parliament, said, “We demand regular gold management.” Michael Jäger, chairman of the European Taxpayers Association, called for “German gold to be taken back from the United States immediately.”

As part of its foreign exchange reserves, the German Bundesbank (central bank) holds about 3,300 tons of gold (as of 2024). More than 50% of the total is kept in Frankfurt, where the head office is located, and nearly 40% is kept in the Federal Reserve Bank of New York under the Federal Reserve Board (FRB).

Generally speaking, the management of foreign exchange reserves is a “black box” that does not disclose information, but the argument that Germany will take back the gold cannot be regarded as pure speculation. In 2017, during Trump’s first term, the German Bundesbank transferred gold held overseas to Germany.