14th September 2026
China has stepped up its gold buying again, with the People's Bank of China adding 20.2 tonnes to its reserves in August. At current prices, that single month's purchase is worth roughly £2 billion.
It is a striking figure, but the more important point is that this is not an isolated Chinese decision. Central banks around the world have been accumulating gold at a rate not seen for decades, raising questions about what they think the international financial system may look like in the future.
China's August purchase was its largest monthly addition since October 2023 and extended a buying run that has now lasted 22 months. At the end of July, China's official gold reserves stood at about 2,366 tonnes. Adding another 20.2 tonnes takes that to roughly 2,386 tonnes, although the official monthly figures and valuation of the holdings move independently of the purchase price.
The scale becomes clearer when put into pounds. Using a gold price of roughly £102,900 per kilogram, 20.2 tonnes is worth about £2.08 billion at today's market price. China has already added around 80 tonnes during the first eight months of 2026, giving those purchases a current market value of roughly £8.2 billion.
China is not alone.
In July, central banks collectively added 23 tonnes of gold. Poland bought another eight tonnes and has become the largest central-bank buyer of gold so far this year, taking its holdings to about 640 tonnes. Kazakhstan, Uzbekistan and the Czech Republic have also been significant buyers.
There is an interesting difference between the buyers. For Poland, gold is partly about national security. Sitting next to a country at war has changed the way Warsaw thinks about reserves. China has a different calculation. It has the world's largest foreign-exchange reserves, worth about $3.44 trillion, but a large proportion of those reserves remain exposed to the dollar and US financial markets.
Gold gives a central bank something different. It is nobody else's liability. It cannot be printed by another government, and it cannot be frozen in the same way as a foreign bank account or government bond. That makes it particularly attractive in a world where sanctions, trade disputes and geopolitical tensions have become part of economic policy.
Russia provides perhaps the clearest example of why central banks are thinking differently. Western sanctions and the freezing of Russian foreign reserves demonstrated that financial assets held in another country's currency can potentially become inaccessible. That has encouraged some countries to build larger holdings of assets that they regard as being under their own control.
But it would be wrong to conclude that the world is suddenly abandoning the dollar.
The dollar still dominates international finance. IMF data put the dollar's share of allocated global foreign-exchange reserves at about 57% in the first quarter of 2026. The euro was around 20%, while the Chinese renminbi remained a relatively small reserve currency.
What appears to be happening is more subtle.
Central banks are looking for diversification. They do not necessarily want to replace dollars with gold. They want to avoid being excessively dependent on any one currency, government or financial system.
That distinction matters.
The dollar's share of global reserves has fallen considerably over the long term, from roughly 71% in 2000 to around 57% today. Yet the dollar remains by far the world's leading reserve currency, supported by the size of the American economy, the enormous US Treasury market, the role of the dollar in international trade and the depth of American financial markets.
Even China is not dumping dollars. Its foreign-exchange reserves actually increased to $3.438 trillion in August. At the same time, it bought gold. That is a good illustration of what is really happening: diversification rather than a wholesale abandonment of the dollar.
There is another important development. Some countries are not merely buying gold but are reconsidering where their existing gold is stored. The Netherlands, for example, has recently moved part of its holdings between international storage locations, while other European countries have also looked more closely at the security and accessibility of their reserves.
The World Gold Council says central banks have accumulated an average of around 1,000 tonnes of gold a year over the past four years, roughly twice the average of the preceding decade. That is a remarkable change in official reserve management.
It also helps explain why gold has become so valuable.
There is a feedback effect. Central-bank buying increases demand for gold. A higher gold price then increases the value of the gold already held by central banks. That can make gold look even more important within national reserves.
Indeed, gold's share of official reserves has become much more significant in recent years. But this does not mean that the dollar is about to lose its reserve-currency status.
The more realistic possibility is a gradual move towards a more fragmented financial world, where dollars remain dominant but are accompanied by larger gold holdings, more use of regional currencies and greater efforts by countries to avoid being completely dependent on the American financial system.
That could eventually matter for the United States.
The dollar's reserve-currency status gives America an enormous advantage. Countries around the world need dollars for trade and hold US government debt as a reserve asset. That creates a large international market for US financial assets and helps the United States borrow on a scale that would be more difficult for most other countries.
Every tonne of gold bought by China or Poland does not represent a dollar sold. But collectively, a long-term shift towards gold and other currencies means the United States cannot assume that its financial dominance will remain unchanged forever.
And that is perhaps the most interesting part of China's £2 billion gold purchase.
It is not really about gold.
It is about what central banks want their reserves to look like in a world where geopolitical tensions, sanctions, debt, inflation and financial power are increasingly intertwined.
For the moment the dollar remains king.
But an increasing number of central banks appear to be making sure they have something else in the vault as well.