China Accelerates Gold Purchases, US-Iran Conflict Does Not Change the Long-term Bullish Logic for Gold

According to the latest data from the People’s Bank of China, as of March 2026, China’s gold reserves reached 74.38 million ounces, marking the 17th consecutive month of increases; in March alone, holdings rose by 160,000 ounces (about 5 tons) compared to the previous month—significantly speeding up from the previous restraint of just 1-2 tons monthly.

Based on official data, since the People’s Bank of China resumed gold purchases in November 2024, there have been periods of rapid accumulation, followed by a slowdown, and recently an acceleration: by the end of 2024, monthly new holdings once reached 10 tons, gradually dropping to the 1–2 ton range, but rising again to about 5 tons in March 2026.

These changes in pace reflect: 1) The central bank has not stopped purchasing gold but is managing the pace according to different market circumstances; 2) During periods of gold price corrections, official institutions once again became counter-cyclical buyers.

Notably, under the impact of the US-Iran conflict, gold prices plunged 12% in March due to liquidity pressures—the largest monthly drop since 2008. First, some emerging market central banks, such as Turkey, Poland, and Gulf oil-producing nations, temporarily sold gold to meet forex liquidity, fiscal needs, or offset the sharp decline in national income due to disrupted oil exports. For example, within two weeks of the outbreak of war, the Central Bank of Turkey used about 60 tons ($8 billion) of gold reserves through sales and swaps to stabilize its domestic exchange rate. Structurally, these sales are more tactical rather than a strategic shift. Second, after the previous surge in gold prices, large amounts of speculative capital had entered the market. Following the outbreak of conflict, risk assets came under pressure and investors were forced to sell gold to replenish liquidity.

Meanwhile, as gold prices crashed, countries less affected by the turmoil—such as the Czech Republic, Uzbekistan, etc.—took the opportunity to increase their gold reserves, maintaining net purchases. However, the volume was small. With March and April being off-seasons for global central bank gold purchases, and combined with previously high gold prices and the recent rise in volatility, the overall pace of central bank gold buying globally has temporarily slowed.

Official data on gold purchases is just the tip of the iceberg; hidden buying is a key support

It is worth noting that the figures officially disclosed represent only a small portion of China’s actual gold demand. By comparing UK customs' net gold export data with changes in London vault holdings, it can be seen that around two-thirds of global official central bank gold purchases are not publicly reported.